Buying Investment Property How to Find REO Homes for Sale in 2020 by Charles Mburugu April 15, 2020April 13, 2020 by Charles Mburugu April 15, 2020April 13, 2020 When it comes to purchasing a real estate investment, there are many options to consider. You could choose to use the conventional method of buying an investment property that has been listed for sale by the owner. The other alternative is to purchase investment property through an auction or short sale. You could also consider purchasing a real estate owned (REO) home. What Are REO Properties? These are properties that have been seized by banks or other financial institutions from individuals that have defaulted on their mortgage payments. To recover their money, banks foreclose on such homes and sell them in a real estate auction. If no one purchases a foreclosed home at the auction, it then becomes a bank owned or REO property. So, What Are the Advantages of Investing in REO Homes? No title liens and outstanding taxes – When buying an investment property, many people find themselves dealing with issues such as title liens and taxes. Such legal problems can prevent a potential real estate investor from taking full ownership of a property. The good news is that REO properties for sale rarely have such issues. Once a home becomes bank owned, the bank ensures that all taxes are paid and any liens against the home are cleared. This saves investors lots of time and money. Discounted prices – The secret to getting a great deal in real estate is working with a motivated seller. Since banks are not interested in holding onto properties, they are usually very motivated to dispose of the homes in their possession. A smart real estate investor can, therefore, leverage the bank’s position to get good REO deals. Concessions for the buyer – At times, there is little room for negotiating a lower price when buying REO homes. However, the bank might still be willing to make some concessions on their REO properties for sale. For instance, you could request that the bank covers costs such as appraisals, home inspections, and renovations. Related: Buying REO Property: 8 Tips Investors Need to Follow How to Find REO Homes for Sale The first step towards owning bank owned properties is knowing how and where to find REO homes for sale. Here are some great tips for finding income properties of this kind: Check REO Listings The traditional way of locating bank owned properties is to simply check one of the numerous sources of real estate owned listings. This includes: Bank REO listings – Banks and other financial institutions compile lists of their REO homes for sale. You can either contact the bank to inquire or look at resources such as the Bank REO Real Estate blog. However, the search process can be time-consuming and frustrating since there are numerous different listings to look at. Government foreclosures – Contrary to popular belief, banks are not the only institutions that carry out foreclosures. Government organizations such as the Small Business Administration, the U.S. Department of Housing (HUD), and Fannie Mae can also repossess a home. Public records – The County Clerk has all the records of properties that have gone into foreclosure. These records are public and can be accessed for free by any interested party. When checking public records, look out for a Notice of Sale or a Notice of Default (NOD). Visit the Mashvisor Property Marketplace The Mashvisor Property Marketplace is the best place to find off-market listings like REO homes for sale. You can narrow down your investment property search using filters such as: Location Miles for the Location Budget Rental Strategy (Airbnb vs Traditional) Type of Property Number of Bedrooms Number of Bathrooms Cash on Cash Return Cap Rate Listing Type In addition, you can use metrics such as cap rate, cash flow, cash on cash return, and occupancy rate for analyzing REO homes for sale in the Marketplace. The Mashvisor Property Marketplace Sign Up for Mashvisor Network with other professionals If you have a good network of professionals involved in real estate, you can get information about REO homes for sale before they go public. This network could include professionals such as: Asset managers – These are companies or individuals hired by lenders to manage any real estate owned properties. They are responsible for hiring anyone else that will be involved in the sale process. REO agents – These are real estate agents that specifically focus on selling bank owned homes. Local REO agents are usually the first to know about REO foreclosure homes in their area. Title agents – Title agents work with sellers, buyers, real estate agents, and lenders to ensure that all the important documents are filled out and signed properly during closing. As a result, they are often privy to available REO properties. Mortgage brokers – A mortgage broker helps connect borrowers to suitable lenders. Contractors – This includes electricians, carpenters, interior designers, plumbers, painters, and masons. Related: How to Buy Bank Owned Homes in 2020: 6 Steps Drive for dollars ‘Driving for dollars’ is a strategy that simply involves driving around neighborhoods of interest looking for homes that appear abandoned or distressed. This is a relatively inexpensive way of finding investment properties for sale. When driving for dollars, all you require is a notebook to write down addresses and a camera. Here are some of the things to look out for: Mailboxes with no mail inside Evident code violations on the property Uncollected newspapers on the front porch Real estate owned property signs in the yard Broken or boarded up windows Related: What to Look for When Driving for Dollars: 19 Things When you come across such a home, conduct some research to find out if the property is bank owned. You may need to find out who owns the house. You can get this kind of homeowner data here on Mashvisor. If it is an REO home, get in touch with the lender and make an offer. Conclusion Buying REO properties for sale can be a very complex process. However, anyone that is determined can learn how to buy REO properties and where to find the best deals. Buying and renting out REO homes can greatly boost the return on investment of your real estate business. Start Your Investment Property Search! START FREE TRIAL Bank OwnedNetworkingProperty Search 0 FacebookTwitterGoogle +PinterestLinkedin Charles Mburugu Charles Mburugu is a HubSpot-certified content writer/marketer for B2B, B2C and SaaS companies. He loves writing on topics that help real estate investors and agents make better choices. Previous Post How to Sell Your First Rental Property Next Post The Ultimate Investment Property Search Tool for 2020 Related Posts What’s Stopping You from Making Money in Real Estate The Pros and Cons of Investing in a Fixer Upper Are There Free Skip Tracing Tools for Real Estate? Condemned Building: Should You Buy One? Top 5 Tips For Finding Real Estate Deals 7 Features of the Best Place to Buy Investment Property in 2021 Buying an Investment Property? Answer THESE Questions First Real Estate Investing 101: How to Buy Your First Rental Property Are Homes for Sale Near Me a Good Idea for Real Estate Investing? Steps to Buying an Investment Property for Beginners Real Estate Investing 101 – Cash on Cash Return How to Make Money in Real Estate: Buy a Rental Property Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.