Utilize The Lender's Misfortune To Increase Your Charlotte Investment Property Holdings

By Samantha Preston

REO properties are repossessed properties that were not sold through a foreclosure auction. They are much cheaper Charlotte investment property options compared to a brand new home. REO properties are sold through each lender's loss mitigation department. Many lenders present bank owned real estate via their company website. REO properties are great homes for investors to buy because they are generally paying below market for the home, and there is a lot of inventory and selection.

One of the aspects of REO properties is that there is no equity, which means that it cannot be auctioned off. Certain risks are associated with REO properties especially if they are taken in an 'as-is' condition. This type of Charlotte investment property has generally been taken up as repossessions by lenders when borrowers default on their mortgage payments. Lenders are generally not interested in bearing management costs and holding costs on such property. They just wish to recover as much of the money they have lost on a failed loan as they can. Which is why they are willing to sell off the re-possessed property at rates that are below what the market wants for the property.

REO properties are also foreclosed properties, but the different part about them is that they could not be sold at an auction. These properties were sent to the bank and they are not carrying a mortgage anymore. REO properties are sticky for lack of disclosure purposes and liability releases more than anything else. You will be informed that the lender is basically released from all liability because they have no clue about the home. REO properties are usually listed for sale with local real estate agents. Given the current state of the economy, lenders are selling their REO properties for a greatly reduced price.

REO properties are a financial burden to banks. All of the upkeep is their responsibility. They are usually sold as is, so a thorough inspection is necessary to estimate the rehabilitation costs. Software programs exist that allow you to print inspection forms and work from a set of standard rehab specifications to help you accurately estimate rehab costs. REO properties are a drain. Each day that a property is vacant, it costs money to maintain.

Lenders are willing to set up special agreements for a buyer's interest to purchase a 'package' of REO's rather than a single property. Lenders have no interest in owning property, and thus usually opt to list their REO properties with a local real estate broker in hopes of a retail sale. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar.

Those who want to look at acquiring an REO property would be well advised to get to know some of the essentials and basic principles in such deals. If the Charlotte investment property is well priced and reasonable there could be a lot of potential buyers, with some of these being institutional buyers too, as a buyer you can look for guaranteed or direct loans. Direct loans can be had as they are funded under the rural housing plan of the government. In case of auctions, one cannot get too much of a chance to inspect properties, which means that REO properties are quite suitable. On the other hand, buying at an auction enables the investor to circumvent the hassles of dealing with lenders. - 23196

About the Author:

Samantha Preston is a real estate investor who enjoys Charlotte investment property. Her specialty is real estate in Charlotte.