What are REO residential or commercial properties? Finding REO residential or commercial properties How to purchase REO residential or commercial properties

If you’re brand-new to property investing and thinking about throwing your hat into the “REO residential or commercial property” ring, there may be wondering how to discover REO homes (and how to close those offers once you discover them).

Though making an REO offer on a residential or commercial property does require patience - and more than a couple of hoops to leap through - discovering how to buy a bank-owned residential or commercial property can be a financially rewarding part of your realty investing portfolio (and can assist you find underestimated residential or commercial properties, without the marketing expense required when buying a residential or commercial property from a homeowner). For what it’s worth, bulk REO residential or commercial properties can be one of the best exit strategies for investors that understand what they are doing.

What Is An REO Residential or commercial property

An REO residential or commercial property, or genuine estate owned residential or commercial property, is a bank-owned home that failed to offer at auction after the owner defaulted on its mortgage. The process of becoming an REO residential or commercial property transpires this way:

- The property owner (customer) stops working to make the mortgage payments on the residential or commercial property

- The lending institution starts the foreclosure process

- The lender submits a notification of default

- The customer continues to fail to pay

- The lending institution problems a notice of sale

- The customer stops working to produce the lending institution needs

- The residential or commercial property is installed for public auction

- The house stops working to sell at auction

- The lender acquires the residential or commercial property

- The lender offers your home to traditionally to home buyers or financiers

Where To Find REO Deals

Understanding how to buy bank-owned residential or commercial properties is something, but if you are going to commit, you need to understand where to find the offers. Here are 3 ways to address the “where to find REO deals” question and put you in an excellent position to get an REO residential or commercial property.

1. Let Your Fingers Do The Walking

The simplest and most standard method for finding REO residential or commercial properties is to simply browse among the many public-access sources of REO listings. This consists of:

- Public Records: Whenever a home goes to foreclosure a notice should be tape-recorded with the County Clerk. As the name recommends, these records are public and available for anybody to view. You’ll wish to search for a Notification of Default (NOD) or Notice of Sale. Most importantly, this type of search is free.

- Bank REO Listings: Most lenders put together lists of all their offered REO residential or commercial properties. The Bank REO Real Estate blog site has a resource where they have actually collected a number of the bigger ones. Though the search is complimentary, the procedure is time-consuming, as there are many various listings to go through.

- Government Foreclosures: Banks and lenders aren’t the only institutions who can foreclose on a residential or commercial property. The government - and more specifically federal government organizations such as Fannie Mae, U.S. Dept. of Housing (HUD), and the Small Company Administration - can acquire a residential or commercial property. And each of them has listings of foreclosure residential or commercial property that you can put on your wishlist.

- Pre-Foreclosure Listing Service: Unlike the sources discussed above, using a service such as RealtyTrac - which aggregates foreclosure and pre-foreclosure residential or commercial properties in one place - is not a long-term free alternative. But the preliminary expense is little when compared to the long-lasting earnings potential these foreclosure residential or commercial properties can bring.

The advantage to these kinds of research-based sources is that the majority of them complimentary, or in the case of RealtyTrac, quite budget friendly. The drawback is that they take valuable time and energy. They are readily available to any other investor searching for an REO residential or commercial property (making it challenging to get a dive on the competition).

2. Leverage Your Network

What’s the best way to discover an REO residential or commercial property before it strikes the general public lists? Leverage your investor network, of course. (An essential advantage when finding out how to buy an REO residential or commercial property.)

This would consist of, however not be restricted to:

- Listing representatives

- Asset managers

- Title agents

- Mortgage brokers

- Contractors

Listing agents and possession managers can be the most valuable, as they normally have a pulse on residential or commercial properties in the early REO procedure. This does, nevertheless, need that you already have an existing realty network or are currently constructing one