Here’s another great question from a subscriber…
Question: “What’s the best way to find bank owned (REO) properties?”
Answer: All realtors are not the same. You need to find realtors who work primarily with investors. These are the realtors who are going to work with what are called REO’s, or bank owned properties. An REO property is a bank term that means Real Estate Owned.
Banks that hold REO properties are motivated sellers. That’s why we focus on these types of properties.
When bank takes properties back, like Deutsche bank, they typically find one realtor in a given city or area. They will list most or all of their properties with that one realtor. Only a handful of realtors in a given city will list most of the bank owned properties.
What most people don’t get is that the listing realtors for bank owned properties generally like to list houses, but they generally sell these properties.
You have to find another investment realtor who will represent you as the buyer. This type of investment realtor wants to sell properties to investors. They generally won’t be the listing agent.
There are a few ways to find an investment realtor to help you find cash flow properties. Look for realtors who advertise “investors special’’ properties. You may also find those realtors at your local real estate investor association meetings.”
Robert Elder comments, “In 29 years of buying houses, the single most common source of buying houses for me has been realtors that were selling bank owned (REO) properties because when the banks takes a property back it becomes a problem to the bank. The problem is the bank has taken back that house, that business property, or that four flex. We the investor, by making an offer, are the solution to the bank’s problem.”
If you are making an offer to buy John the homeowner house, it’s a much more emotional decision to cut the price ten thousand dollar. Why? That’s ten thousand dollars less money in John’s pocket.
On the other hand, if you are making an offer on a bank owned (REO) property, the is much less emotional about that decision. If the bank cuts the rice ten thousand dollars, it’s not going to come out of the banker’s own pocket.
Please make a comment below on this article…I’d like to know what you think.
December 6th, 2009 at 2:50 pm
I enjoyed this interesting topic and look forward to seeing more!
we all know it is not easy as a paw print to get properties nowadays.
regards
Drew
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