By Joseph Palumbo III
We are looking for that next great neighborhood investment opportunity. Enter real estate owned properties. REO props are quickly becoming hot commodities for the novice and seasoned real estate investor.
REOs have been returned to banks after failing to sell at foreclosure auctions. Banks are stuck with them and looking to make deals.
REO properties have no equity but inflated mortgages. They can range from single- and multi-family dwellings to commercial buildings and vacant land. REO properties do not always sell for pennies on the dollar.
The exception to this rule is purchasing an REO from a private investor, who owns the property and has the leverage to make you a better deal. Many banks will publish their REO properties directly on their Web sites. Generally, a loss mitigator is assigned to the property. This person can make or break the deal with you.
As in most business deals, it is rare for the loss mitigator to accept your first offer. Usually you will go back and forth will countless counter-offers. To purchase an REO, go through a private investor or investment firm that already owns the property.
In these cases, it is common to pick up properties at 65 cents to 70 cents on the dollar. Bear in mind, though, that there will almost always be work to put into these properties. The upside is that you will pay less for something probably worth more.
So How's Business regarding REO properties? Many real estate brokers, agents and analysts have agreed and stated that it would be wise to invest in REO properties. They predict REO properties will generate millions for savvy real estate investors.
Reach Joe Palumbo at 516-248-0256 or info@camelotlimo.com.
