 |
 |
|
California, CA Houses For Sale. Find a Wholesale Bank-Owned REO in California, CA:Feaured Topic: REOIn general REO contracts are not assignable so the investor must have a means to fund the transaction. In order to bid at a foreclosure auction, you must have a cashier's check in your hand for the full amount of your bid. Real estate owned or REO is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. A great way to buy and keep an REO home in Southern California is to rent it out during the downturn and let the renter make your mortgage payment. If care is taken in the analysis of these purchases, a great profit can be realized in monthly cash flow and equity growth over time. Most offers made on REO properties that contain the phrase and or assigns will not be considered by the bank or the REO listing agent. REO investors who understand the market values in their chosen areas are able to make quick and confident buying decisions beating the novice investor to the punch. The use of weasel clauses in an REO purchase shows a lack of confidence on the buyers part and should be avoided when making REO offers. Some REO listing agents are able to convince the bank to put out some money for repairs so they can sell the property for the maximum amount. Most REOs are secured by an agent lock box and will require an agent to access the interior. 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. Fannie Mae uses a state-specific real estate purchase contract and a real estate purchase addendum for their REO properties. If there is anything in the document you don't understand or aren't comfortable with, you may want to contact a real estate attorney, the real estate sales professional who has listed the property, or any real estate professional of your choice to review these documents with you. REO buyers should be aware of the following basic FHA loan qualification guideline: Foreclosure's must be at least three years old, with perfect credit since. Remember that these guidelines are subject to change at anytime and you should stay abreast of current loan programs. Most REO listing agents list only REOs and no other type of property. FHA buyers might back away from buying the bank REO if the appraisal calls for conditions. While it is true that FHA appraiser guidelines have relaxed since 2006, foreclosed homes that are older may require too many repairs. Appraisers will note missing bathroom toilets and sinks, peeling paint on pre1978 homes, inoperable or missing kitchen appliances such as a stove. 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. Many REO investors are doing their work by desktop, that is, on the computer and never really get out into the field. This is a sure way to make mistakes that will hurt later. An REO hold buyer should be familiar with the local municipality and their code enforcement policies. Many cities are hurting for money and have taken aim and bank and investor owned REO properties to generate revenue. REO: this is an acronym for Real Estate Owned, and this used to be called the bank department that managed the properties the bank had reacquired through a foreclosure process after the auction. What are the benefits of buying an REO property that has been foreclosed on and what are the reasons they failed to find a buyer? Other ways to buy foreclosures are to buy at a public auction or buying bank owned or REO properties. These properties are often priced for less than what is owed on them because the bank does not want to hang on to a bunch of properties. |
