REO properties or Real Estate Owned is a term used for homes that were otherwise foreclosed on and ultimately not purchased at auction. You see banks are in the business of loaning money and in particular offering mortgages on homes. Not so much owning homes but when the assets go south and into foreclosure, they try to gain what they can of their loses back by foreclosing on the property to recoup what they can. Often though in a down market the foreclosed properties go unsold at auction and the bank has no other choice but to hold said properties on their books until such time they can sell off the foreclosed homes to as close to their loses as possible. To salvage their investment, banks foreclose on homes with unpaid mortgages and try to sell the properties at foreclosure auctions. If a home does not sell at the foreclosure auction, it then becomes an REO property and stays on the bank’s books until such time that they can sell it.
This is a perfect scenario for an investor to come in and look through the bank’s books of REO’s and negotiate the sale of one or more of these properties and the easiest way to do so is with loans from investorprivatemoney.com.
Foreclosure auctions do not always work
In a depressed market auctions often fail to bring in any bids at all. Mainly because the properties have been sitting for some time, possibly gone into disrepair and the institution is still attempting to get what they can out of the property to cover their loses and fees. Often though that pushes the auction price over market and the homes continue to sit.
When foreclosures become REO properties
Once a property has been foreclosed on, and the occupants have been removed from the property then the property is typically listed by a broker to help in locating a buyer. The REO is then sold in “as is” condition and although you may find an institution holding lots of REO properties on their books do not think you will be able to steal it away. They will know the market and its cycles, but you may be able to come in on a slow cycle and negotiate a sweetheart deal on one or more properties generally if the market has been slow.
Investorprivatemoney.com can work with you and their lending sources to offer financing with a quick close in situations such as this. They can even structure the loan as a “Fix and Flip” so you will have the cash on hand to make any repairs or renovations needed. Then you can get it back on the market to make a quick profit or you may want to structure your loan as a “Fix and Hold” if the market is better for rentals and add the property to your rental portfolio. Either way, investorprivatemoney.com can help you get the cash you need to wrap the sale up as fast as possible and with terms that will not break your bank.