May 06 2008
REO Property
Once a home has been foreclosed on, and is owned by the bank, it is called REO or Real Estate Owned ‘by the bank’. These properties typically are in need of some repair, and have often been neglected by the previous owner.
Banks are not in the real estate business, and their only concern is getting it off their balance sheet. If you are an investor, or a savy buyer, this can work to you advantage.
Make sure you do your homework, and compare the REO to other sold properties in the neighborhood. I would recommend at least 3 other solds within the last 6 months. Then, take a look at how much you will have to invest in updating, repairs, and carrying costs before putting it back on the market. If you still have a good spread between comps and your costs, a property might be a good investment for you.
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