Understanding the World of Washington REOs

Many would be investors eyeing the Washington REO market don’t understand how the industry works. If you want to try your hand at buying and selling REO’s there are a few things you should understand before taking the leap:

 

 

Banks Are Eager To Sell REOs

The first thing would be investors should understand is that banks are eager to sell REOs because they are non-performing assets which can drain them financially.  However, this doesn’t mean that banks are willing to just give REO properties away.  While an REO may lose money today, it does hold potential future profit which must be considered when selling to an investor. So the investor needs to understand the local market.

BPOs Are Price Estimates On The High-end

The broker price opinion (BPO) is just that, an opinion and is usually on the high-end or right at market value.  Seasoned investors understand that a variety of BPOs and Appraisals were used to generate the face value of the property.  The goal of the REO game is to make sure that you’re buying as close to the true value of the property as possible or even way below market. Remember, the BPO does take into account an offer price that takes into consideration what the property’s value will be once all repairs are made, you don’t want to buy at that price.  Investors want to buyer at a value that allows them to earn some sweat equity.

 

Good Relationships Pay Off

If you’re really interested in making a living selling REO investments or just increasing the size of your real estate investment portfolio, then take the time to develop key relationships with REO Agents, Construction professionals, Lenders, and Title & Escrow.   Having all these vendors lined up can get your increase your investment return.    Also, construction/repair professional is more likely to work honestly with you if you can offer them several REO fixer-upper jobs as opposed to just one.

 

 Our Goals are to Help our Investors make money in Today’s Market by educating them.

Please leave any comments or questions you may have! 🙂

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