If you are looking to buy an investment property right now, you have several options to choose from, one being REO properties. REO properties can be one of the prime sources of lucrative real estate deals for both flippers and landlords.
These are properties that have been repossessed by a mortgage lender after they fail to sell at a foreclosure auction. When the title to the property is reverted to the lender, the lender will re-sell it.
Buying bank owned investment properties can provide incredible benefits. First, since lenders are motivated to dispose of the properties, they are inclined to offer discounts. Since properties are quite expensive in today’s real estate market, they can offer a less expensive alternative to the traditional route of investing. REO properties also involve less potential complexities compared to short sales or foreclosures. You’ll often get a clear title and a vacant property.
Related: Pros and Cons of Buying REO Property for Real Estate Investing
While REO deals can be lucrative for investors, finding them can be challenging for beginners. That’s why we’ve put together this guide to show you how to find REO properties today.
8 Ways to Find REO Properties
Real estate investors can employ a variety of methods to find REO properties for sale. Here are some great tips for finding them:
1. Use the Local Multiple Listing Service (MLS)
The first place you can find REO listings is in the MLS. A majority of mortgage lenders work with real estate agents to list and sell their REO homes on the MLS. A local REO agent can even inform you about eligible REO properties before they are listed. They are usually the first people to know about REO properties in your area.
Once your agent learns about the availability of an REO property in your area that fits your budget and criteria, they will contact you immediately. Try to find an experienced local real estate agent who specializes in REO homes.
Related: Why Real Estate Investors Don’t Need MLS Access
2. Search on Bank Websites
Many major banks have sections on their websites where they maintain lists of their available REO properties. You can explore REO properties on multiple bank websites. However, it’s important to be aware that lending institutions handle REOs differently.
Not all banks will sell REOs to individual buyers. Some banks, especially the large ones, often prefer to dispose of their REOs by bundling them into a package. Some national lenders who maintain REO listings include Bank of America, U.S. Bank, Wells Fargo, and Chase.
3. Contact Lenders Directly
Not all lenders will list their REO properties on their websites. For such lenders, you can contact them directly and make an inquiry. When contacting the lender, ask for the asset management department or the REO department since they are usually the ones that handle REO listings.
4. Public Records
If you are thinking of where to find REO deals, public records is another great option. You can find records of properties that have gone into foreclosure with the County Clerk. To find REO properties, search for legal notices such as Notice of Default or Notice of Sale. The good thing about searching public records is that it’s free. You may also find properties that have just been posted and are yet to reach online marketplaces.
5. Government Agencies
Apart from banks and other mortgage lenders, government organizations can also carry out foreclosures. For instance, government agencies like the Federal National Mortgage Association (Fannie Mae), Department of the Treasury, and the U.S. Department of Housing (HUD) can take possession of a home. You can often find such listings on their websites.
6. Leverage Your Real Estate Network
One of the best ways to find bank owned REO properties before they are listed publicly is to build a good network of real estate professionals. Some of the real estate professionals that can be privy to available REO properties before they go public include REO agents, asset managers, title agents, mortgage brokers, and contractors.
7. Do a Drive-By
You can find bank owned properties by simply driving around your target neighborhoods and checking for signs such as “Bank Repo”. Contact the agents on the signs and inquire about upcoming REO listings. You may find REOs that are yet to be listed.
8. Visit the Mashvisor Property Marketplace
There are some real estate websites that provide REO listings in the US housing market. Mashvisor is one of the best because it allows you to not only search for REO listings that meet your budget and criteria but also conduct investment property analysis. This ensures that you always buy profitable REO properties. You can do all of this through one of Mashvisor’s real estate investment tools – the Mashvisor Property Marketplace.
The Mashvisor Property Marketplace provides a vast supply of off market listings in the US housing market including bank REO investment properties. The tool has helpful property filters to help you narrow down listings according to your investment criteria. They include:
- Location
- Budget
- Property type
- Rental strategy
- Number of bedrooms
- Number of bathrooms
- Listing type
- Cash on cash return
- Cap rate
With the help of Mashvisor’s investment property calculator, you can get a full investment property analysis with the click of a button. This includes key real estate metrics such as nightly rates, rental income, cash flow, cash on cash return, cap rate, and occupancy rate. You will be able to see the potential returns of the property as a traditional property and as an Airbnb property and determine the optimal rental strategy. In addition, you’ll get real estate comps to make sure you’re looking at a below market value deal.
Related: Mashvisor Property Marketplace: A Guide for Real Estate Investors
The Bottom Line
REO properties give real estate investors incredible opportunities that are not available with pre-foreclosure properties and properties sold at a foreclosure auction. Owing to its benefits, learning how to find REO properties can be a crucial part of your real estate investing business. If you are considering buying REOs soon, be sure to employ some of these strategies.
Do you need help finding suitable properties and managing the relevant real estate data? Mashvisor can help. Sign up for a 7-day free trial now followed by a 15% discount for life.