Real estate owned (REO) properties can be a fantastic investment opportunity for buyers who either want to resell the property for profit or rent it out long term. It’s important to hire an experienced agent who can help you navigate the process, but there are definitely a few advantages to investing in a bank-owned property. Check them out!
When a house is under ownership of the bank or lender, they want to sell it quickly to minimize losses. From an investment standpoint, that’s a good thing because the property is less likely to have an inflated price tag. Depending on the circumstances, you may even find an REO property listed below market value.
Return on Investment:
You can do this one of two ways:
1. Renovate and resell – also known as “fix n’ flip” – where you make the necessary repairs to a property and then resell it for higher than the purchase price plus renovation costs. This can be a bit of a risk, but if done right, you can get a significant return on your initial investment.
2.Renovating and renting. Rather than getting all of the profits in one big payment, you’re able to generate a steady stream of income for as long as you own the property.
Fewer Buying Obstacles:
Purchasing a bank owned property isn’t the same as buying a property from the owner, but that’s not necessarily a bad thing. One of the most important differences is the fact that the lender will typically take steps to clear any tax liens or title issues associated with the property before attempting to sell it. That in itself can be a major time saver if you’re hoping to move forward with a sale sooner rather than later.