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

If you're new to realty investing and thinking of tossing your hat into the "REO residential or commercial property" ring, there may be questioning how to discover REO homes (and how to close those deals once you discover them).

Though making an REO deal on a residential or commercial property does require persistence - and more than a couple of hoops to leap through - discovering how to buy a bank-owned residential or commercial property can be a profitable part of your realty investing portfolio (and can assist you discover underestimated residential or commercial properties, without the marketing expense needed when purchasing a or commercial property from a property owner). For what it deserves, bulk REO residential or commercial properties can be one of the biggest exit techniques for financiers that know what they are doing.

What Is An REO Residential or commercial property

An REO residential or commercial property, or realty owned residential or commercial property, is a bank-owned home that failed to cost auction after the owner defaulted on its mortgage. The procedure of becoming an REO residential or commercial property transpires in this manner:

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

- The lender begins the foreclosure procedure

- The lender submits a notification of default

- The borrower continues to fail to pay

- The loan provider issues a notice of sale

- The customer fails to produce the lender requires

- The residential or commercial property is installed for public auction

- The home fails to cost auction

- The loan provider acquires the residential or commercial property

- The lending institution sells your home to traditionally to home buyers or financiers

Where To Find REO Deals

Understanding how to purchase bank-owned residential or commercial properties is one thing, but if you are going to commit, you need to know where to find the offers. Here are three methods to address the "where to find REO deals" question and put you in an excellent position to acquire 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 just browse among the numerous public-access sources of REO listings. This includes:

- Public Records: Whenever a home goes to foreclosure a notice need to be tape-recorded with the County Clerk. As the name suggests, these records are public and readily available for anyone to view. You'll want to look for a Notification of Default (NOD) or Notice of Sale. Best of all, this kind of search is totally free.

- Bank REO Listings: Most loan providers compile lists of all their readily available REO residential or commercial properties. The Bank REO Real Estate blog has a resource where they've gathered a number of the larger ones. Though the search is free, the process is time-consuming, as there are several listings to go through.

- Government Foreclosures: Banks and loan providers aren't the only institutions who can foreclose on a residential or commercial property. The federal government - and more specifically federal government companies 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 place 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 location - is not a long-lasting totally free option. But the preliminary cost is little bit when compared to the long-term 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 free, or in the case of RealtyTrac, rather budget friendly. The drawback is that they take valuable time and energy. They are offered to any other investor looking for an REO residential or commercial property (making it difficult to get a jump on the competitors).

2. Leverage Your Network

What's the very best method to discover out about an REO residential or commercial property before it hits the public lists? Leverage your financier network, of course. (A key benefit when learning how to buy an REO residential or commercial property.)

This would include, but not be restricted to:

- Listing representatives

- Asset supervisors

- Title representatives

- Mortgage brokers

- Contractors

Listing representatives and property managers can be the most helpful, as they usually have a pulse on residential or commercial properties in the early REO process. This does, however, need that you already have an existing realty network or are currently developing one