Bank Owned Real Estate – What You Must Know When Buying Bank REOs

Bank Owned Real Estate - What You Must Know When Buying Bank REO's

Buying bank REO’s is not an incredibly difficult process, but one that you must learn about. As a real estate investor, you have had to learn things down the road. You know things that the average individual looking to buy a property does not know.

You know that a strategy is needed, money is needed, and you know that you have to have some initiative to find the best deals possible. As a real estate investor, you have an advantage over the general public and you have to make that advantage pay.  If you’re struggling in your endeavors, then you know that there is something that you’re missing.  

If you’re struggling, you know that things have to change so that you not only have an advantage over the general public, but so that you have one over other real estate investors.  

Bank REO’s are full of a lot of opportunity because these are properties that have already seen the auction block. The bank still has the property because they bid on their own auction in hopes that someone would bid higher.  

In the beginning, it is about the bank getting as much money as they can, but it later becomes a matter of someone taking the property off of their hands. This is where you can step in. However, you have to keep some things in mind:

  • Sometimes, the bank may have one person working in their REO department. This means that a loan broker will handle the property. When dealing with a third party, you do need to be mindful of the details.
  • You can buy directly from the bank, so it is important to see if they will only take cash for the property or if they will finance for a higher price.
  • You have to ask if the bank will compensate in the case that something is wrong with the property or if the property becomes defective at some time during the buying process.
  • When looking for properties to buy, it is best to buy from the bank. The other option is to check the MLS (Multiple Listing Service), although the best deals are not available this way.
  • Don’t go to auctions to buy property, but to identify buyers. Hand out business cards and get theirs because not all of those people will obtain property at that auction.
  • Make yourself known amongst the main players in your area so that you are the one they call when an REO property is on the market.

This is how you become aggressive in your investing. You have to make yourself seen, make yourself known, and you have to know where to look. It does take some work, but it is something that you can do.  And the pay day is well worth it.  

As a real estate investor, you have to identify opportunity in order to scale down competition. Bank REO properties can provide you with a 35% to 50% profit. That is something you may not be able to achieve through other property acquisitions.  

If you have never seen profits like that, now you know that they are out there and you need to go get your fair share.