Real estate owned or more commonly known
as REO, basically is a class of property
owned by a lender, typically a bank or
other financial institution, after an
unsuccessful sale at a foreclosure auction.
For the most part the properties that
are up for sale at these auctions are
worth less than the total amount owed
to the bank or financial institution:
the minimum bid in most foreclosure auctions
equals the outstanding loan amount, as
well as the accrued interest and any fees
(listing/legal) associated with the foreclosure
sale.
(*Note: For
all intents and purposes of this site,
REO will also include any asset held by
banks and financial institutions being
sold at discounted rates, such as Non-Performing
Notes, Performing Notes, CMO's, etc.)
After an unsuccessful auction, the bank or financial institution usually goes through the process of trying to sell the property directly. They normally will strip some of the liens and other expenses on the property and try to resell it to the public, either via yet another auction or through a real estate agency.
In some cases REO properties may very well be in poor shape, but real estate investors will often fish for such deals due to the low price and make the repairs and resell the property.
Now with that said, most banks or financial
institutions will pool together a group
of REO's and sell them privately to high
net worth investors or investor groups
at a deep discount. HF Group not only
brings such packages to the attention
of our clients but we also assist our
clients in creating an exit strategy after
carefully evaluating the content of the
properties in each package.
This has proven to be a great asset to our clients as it gives them an outlet to sell off each of the individual properties or group of properties in short order.
