One great option for real estate investors is to look into REOs - real estate properties that are owned by the bank. After all, when you’re investing in real estate, there’s a chance that you are going to find some great bargains by talking with the “new owners” - professionals at the bank.
What you’ll quickly discover is that, these days, real estate investors are not the only ones who are turning to REOs and looking for a great deal; the other thing that you’ll discover is that there’s a bit more competition out there - especially once people hear more about REOs:
(source)A short sale occurs when a mortgage lender gives approval to homeowners to sell for less than they owe on their mortgage in an attempt to avoid foreclosure. The trouble is, lenders often take months to okay the transactions, the foreclosure happens after all, and the property becomes an REO.
With more demand for REOs, multiple offers abound, a phenomenon that has stunned some buyers, said Lee.
“It’s a secret nobody knows,” he said. “You have to write a full-price offer. If you want it, everybody wants it.”
The competitive landscape has discouraged the Hernings, who thought they’d have an easy time buying because “all you hear about is ‘Oh, the market is terrible,’” Herning said.
What seems like bad news for the average consumer when it comes to foreclosures and REOs is actually a great learning opportunity for those who want to generate wealth as real estate investors. When you’re planning to invest in real estate and are looking at REOs as an option, it’s important to look at your options.
First, an option that is available to you is to make sure that you have a relationship with someone at the bank; that way you will be in a better position to have your deals approved. Similarly, you’ll have the option to negotiate deals with the bank up front - something that consumer buyers aren’t going to be able to do.
In other words, when you notice that others consumers are having trouble doing something, focus on your perspective as an investor; rather than repeating mistakes that they have made, take the time to learn more about your investments and find those tools that will make you far smarter than the average consumer.
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