WLCCI

Making Money On R.E.O.s

When there are no other bidders at the public sale, the bank, by law, becomes the owner of the property. These properties taken back by banks are not assets, they are liabilities. Banks are naturally eager to sell these properties to generate cash or a mortgage loan, both of which would be assets.

Every banks has a list of R.E.O.s which it is generally willing to show to you, especially if the bank thinks you are a sincere and qualified investor.

Assume that you select one or two properties from the list that you think would make good investments. If the asking price is not shown on the list, then find out the price and terms from the banker. Remember, the banker’s first price and first offer of terms is not the final one. Most bankers are willing to negotiate, especially with R.E.O.s. Some bankers are even willing to sell the properties on a lease option.