How To Buy a Bank Owned Foreclosure (aka REO) In 4 Easy Steps

We’re starting to get some calls from people looking to buy REO’s but need a little guidance on how to begin, so here is some basic info that you can use as a checklist to help you get things under way.  

1. Define your strategy. Cash flow vs. Appreciation.  Let the math dictate the offer price and know how far you are willing to deviate from your baseline.  Real Estate investing is too important to do based on feelings or hunches, if you don’t want to crunch the numbers, work with someone who will.
   
2. Is your financing in place?  Timing counts when buying REOs.  There are other investors looking at the same properties so a deal for you is probably also a deal for a dozen other investors.  There are bargain hunters in every market so you must be prepared to act when the right deal comes along.
   
3. Don’t be disappointed by rejection or failure.  It’s called a buyer’s market for a reason; other opportunities will come along as long as you aren’t too busy moping over the one that got away.
   
4. Write clean offers, write clean offers, write clean offers.  Put down at least 1 percent, have reasonable straight forward contingencies,(no contingencies dependent on your uncle’s cousin’s friend giving the final ok), and show you are willing to close in a reasonable amount of time.
   
   Of course there is more to buying foreclosures than four simple steps so feel free to contact us if you have any further questions.