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Featured Topic: REOThe time required to purchase an REO is generally much shorter than a short sale as REO's will already have a list price that the bank has agreed to. In an REO, the bank now owns the property and the mortgage loan no longer exists. Fannie Mae guidelines allow investors to buy up to 10 investment properties. This is an excellent opportunity to build a portfolio of cash flow REO houses. There are multiple sources of funding currently available to investors purchasing REO's in Southern California. An asset manager is the internal position within an REO department that allots the listings to local agents. They are judged on their ability to find agents that can quickly sell the inventory at the highest price. Buying well researched and identified cash flow REO homes now will create a solid portfolio that will provide great cash flow and equity appreciation in the future. Lenders are flooded with foreclosures and aggressively slashing prices on REO foreclosed homes. Most successful trustee sale buyers are very experienced and have advanced research techniques. Many investors find the REO market to be a much safer environment. Depending on how long an REO has been vacant it can need varying levels of repair from minor cosmetics to serious structural issues. Discussing cash flow numbers and formulas with you CPA or real estate lawyer is a good idea to fully understand the long term tax implications of a buy, rent and hold REO deal. HomePathRenovation Mortgage Financing is special financing is available on only Fannie Mae homes you make your primary residence. In addition to your ability to pay for a mortgage on an REO (as indicated by your debts and income), FHA will look at your ability to repay as indicated by your credit report. If the bank won't budge and you receive an offer rejection, wait another 7 to 30 days and then resubmit your original offer, with the original date crossed off and your new date inserted. Buy an REO when the bank finally relents and lowers the price. And don't just wait for this to happen. Make your own luck. Find the right buyer, know when the lender is going to lose patience, and show up with the right offer at the right time. Many investors shy away from REO properties or HUD homes because they feel they have less negotiating power or simply lack the capital to make aggressive offers and play along with the rules that REO lenders stipulate. Purchasers of single-family foreclosed REO homes offered through Freddie Mac’s HomeSteps division will receive a comprehensive two-year home warranty paid for by Freddie Mac, the company announced Monday July 20th. Many REO experts are involved in wholesaling their REO homes. They will pass along a deal they found in as is condition to another buyer for a nominal fee. Many REO investors do not realize the large number of homes that have gone back to banks but remain unlisted will eventually hit the market and have an impact on price. Buying a bank-owned or REO property may take an equal amount of time and angst, but the property will be vacant and easier to inspect. Do a Google search for 'Real Estate Owned' or 'REO'; this will give you a list of websites where you can find bank owned properties. |
