Real Estate-Owned Properties
REO is an acronym for Real Estate Owned, the term came from banks who ended up owning real estate they had issued promissory notes on through a foreclosure or Deed in Lieu of foreclosure. When a borrower defaults they have several options:
- cure the default
- Sell the home to another buyer and pay off the note
- give the property back to the bank through a deed in Lieu of foreclosure
- sell the house to another buyer without collecting enough to pay of the note (short sale)
- be subject to a foreclosure.
Lenders are not set up to handle REOs they are not good property managers, and purge their REO inventory on a regular basis
We acquire REO's in two ways: a direct purchase from another lender, or from a borrower who cant meet their financial obligations. Many times these properties will have a significant amount of deferred maintenance that needs to be addressed before we can convert it into an income-producing asset.
So whats the advantage here? REOs can provide an exceptional below-market value, creating an opportunity for high return on investment with multiple exit strategies.
REOs can provide exceptional below-market value to create an opportunity for high ROI with minimal risk.
To offer relief, we sometimes take properties back through a deed in lieu of foreclosure or through an actual foreclosure.
Millennial Capital is a rare find in this industry. Scott and his team work incredibly hard to make sure the investments are as safe and smooth as possible. Every question we have is answered quickly and to our satisfaction, and the transparency of their program is first-class. It was an absolute pleasure for us, and we look forward to a Continue ReadingWilliam W. (Arizona)