REO asset management refers to the management of real estate owned properties. These are the properties that have been foreclosed and had no bidders offering to buy at the minimum bid at their foreclosure auctions. These properties are returned to their lenders, usually banks or mortgage companies, who then own these properties as non-performing assets. After the lender takes ownership of the foreclosed property, they will try to sell it on their own. Would you want to buy one of these properties? In this article, we will go over a quick guide on shopping for REO properties.
If you are looking to make money through real estate investment, REO properties are something that you may want to consider investing in. Although REO properties are usually poorly maintained and need a lot of repairs, they are sold at a cheap price and can be worth it if you know what to look for. Always consider the price of the property, the price of the repairs and improvements that will be needed, and the price that you expect to sell the property at after you have fixed the place up. If you weigh all these things carefully, REO properties can be a very lucrative investment. Most lenders and banks have separate departments that take care of the REO asset management. If interested in buying an REO property you would go to this department, make an offer, and negotiate with the REO asset manager until you reach an agreed upon sale price.
In conclusion, REO properties can be a diamond in the rough and are something to consider for real estate investors. Go to your local bank or lender and check out their REO asset management department for opportunities. Remember if you decide to buy, that it will be a big risk and you need to carefully consider the potential value of the property vs. your initial costs to avoid any big regrets.