Short sale vs. REO What's better?

[Eddie Ziv]

Common wisdom may argue that REOs are better deals than short sale. The market have been exhausted, the auction didn't produce results and now the bank is with the back to the wall trying to get rid of the property. What plays against the REO buyer usually, is the condition of the property. Another word, more extensive rehab, more money spent.
So, the bottom line question. In general, what is better and more profitable? Short sale deal or REOs?

[Timothy W.]

Good shortsales are better than bad REOs and good REOs are better than bad shortsales. That's really all there is to it. REOs, shortsales, retail purchase, adverse possession....they're all just different means to an end and each has their ups and downs. There's nothing magic about any one of them (except maybe adverse possession....I really want to pull off one of those some day). Cash flow doesn't care how you got the property as long as you got it at the right price for acquisition and repairs.