Bank REOs

[Andre Beraud]

How are you? My name is Andre Beraud. I was wondering is it a great idea to buy Bank REOs. WHAT ARE THE PROS AND CONNS TO BUYING BANK REOs. Thank you so much for your time ans support. SEE YOU AT THE TOP

[Victor Menasce]

Real Estate Owned properties (REO) are properties that have gone through the judicial foreclosure process. They went to auction on the courthouse steps, and for whatever reason failed to sell at auction. They went back to the bank and became classified as an REO property. The bank is still trying to dispose of the property.

There's no real drawback to an REO property. The banks have a few rules that they like to enforce as part of the sale process. There is usually some room to negotiate.

1) Banks prefer to sell to individuals rather than professional investors. They hate the idea of investors profiting from the bank's losses. So they sometimes insist that the buyer be an individual, not a corporation.

2) They also usually insist that the contracts are not assignable. So you cannot wholesale the deal to another investor. Again, they don't want to lose money and see an investor profit from their loss.

3) Banks tend to be intimidating in their negotiations. However, you can negotiate with them just like any other party. I successfully negotiated a $50,000 reduction in price in a multiple offer scenario. 

4) Do your math. Make sure that you stick to your numbers. Don't let their negotiation stance influence your discipline on what constitutes a viable project.