Most real estate investors have heard of the amazing deals that are available when you buy bank owned property (also known as REO property), yet most people aren’t really sure why they should learn how to buy REOs. This article discusses 7 Reasons why real estate investors should learn how to buy REOs from banks.

There are challenges with purchasing REOs. For example, many of the properties suffer from neglect and need substantial fixing up or rehabbing.

Also, REO deals can take months to negotiate and close, and sometimes it’s not that easy to track down the bank personnel you need to negotiate with.

However, if you can get the right price, REO properties can provide tremendous upside potential and quick cash from wholesaling. With that said, let’s look at 7 reasons why real estate investors should learn how to buy REOs from banks:

Reasons #1 – Opportunity to Wholesale For Quick Cash. Because many REO properties need fixing up, and because you can buy them from highly motivated banks at cheap prices, you have a great opportunity to do “wholesale” deals with REOs (deals where you buy low and then flip the contract to another investor for a quick cash profit). Usually, you can find REOs that need only minor fixing up or mostly cosmetic work, then do the work inexpensively before flipping the deal to a retail investor.

Reason #2 – Large Available Inventory. With foreclosures at all time highs, the inventory of REO real estate has never been as high as it is right now. This large inventory means you have many more REO properties to choose from presently than you would have even a few short years ago. This means that your chances of finding an REO property that fits your needs is better now than it has been in a very long time.

Reason #3 – Great Prices From Highly Motivated Sellers. Banks are not in the business of owning property. When they loan money, the last thing they want is to have to take the property back in a foreclosure. So, when they do find themselves owning real estate foreclosures, they tend to offer substantial discounts on those properties just to “get them off the books.” That means great prices for savvy real estate investors who know how to buy REOs.

Reason #4 – Availability of Favorable Seller Financing. Since banks actually ARE in the business of loaning money, they can offer more generous financing terms when they find themselves in the position of selling real estate. So, when negotiating for REOs be sure to ask about financing options.

Reason #5 – Availability of No Cost Expertise. Many realtors, looking for ways to grow or maintain their businesses in these falling markets, have become experts in dealing with REOs. You can use their expertise to walk you through the unique aspects of the REO finding and buying process and they get paid by the bank for helping you make the deal happen.

Reason #6 – Convenience. Banks want to move their properties so they generally make it easy to see and inspect the REOs they have for sale. Homeowners facing foreclosure may be resentful of your attempts to inspect their home. Dealing with the bank removes this emotionality from the equation.

Reason #7 – Professionalism. Many homeowners, especially those going through the challenges of foreclosure, can be emotional and difficult to deal with. Banks are all business, so you can count on dealing with someone who is professional and interested in getting the deal done.

As you can see these 7 reasons why real estate investors should learn how to buy REOs from banks make a powerful argument for adding REO buying to your current mix of real estate investing activities. If you haven’t already explored the world of REO buying and investing, it’s definitely worth a look!

By: Roland Frasier

A real estate bird dog is a person who finds property investment deals for investors without having to buy it. It is considered a risk free method of investing and a great method of learning real estate investments while making money. But the question is, can virtual bird dogs make money in the real estate industry? And if so, how?

So how do they make money?

Successful real estate bird dogs are making good amount of money by locating deals for their investors whether in good or bad times. That is bird dogs get a referral fee for finding good deals for other investors. This is often where people begin their investing career as there is only time at stake. They are typically paid when the deal closes. Typical fees for virtual bird dogs range between $500 and $3000.00 dollars. On the other hand, some bird dogs will structure companies and partnership arrangements as they’re frequently not real estate agents and may not be able to collect a “referral fee” for their services.

An investor may pay $500-$1000.00 for a bird dog fee, which is good enough just by doing a couple of hours of work during your spare time. But the good thing doesn’t end there. The best part is that you can observe and learn the strategies on making a deal, how that investor rehabs and sells the property, etc. Once you have seen your investors make $20,000-$30,000 profit, it won’t take long for you to develop the motivation that you need to start investing on your own.

Becoming a virtual real estate bird dog provides a number of benefits as it allows you to earn while learning the ways and means of real estate investing. And the old adage which says “practice makes you perfect” works perfectly well when it comes to real estate bird dogging. Being a virtual bird dog allows you to practice real estate investing, because you can follow the progress of each of the homes that you were paid to locate, and eventually learn many things from the experts in investing while doing the business.

By: Terry Wygal

Many real estate agents enter the real estate market each year attempting to know real estate so that they can represent their clients who expect that they know something about real estate. Some agents feel that they know real estate after they take their state exam because they don’t know any better. But the truth is that they don’t know real estate until many things transpire to make them a real estate agent and those things come from knowledge.

In this article, I will give you what I know to be the truth about learning real estate and give you some simple step by step instruction on what it takes to learn real estate and become the professional that is hired by the public to protect them. This is really simple but it requires a simple approach that can be tedious and boring to a salesperson. However, as a top agent in my field and the number one agent in Georgia, I can tell you, this is what has to be done if you are going to protect your client.

Learning real estate is a process

Real estate is a process of learning the system of the contract and the MLS. Here are the 7 steps to becoming good at what you do for a living:

Read the Purchase and Sale Agreement 50 times or more over the course of the first month in the business. Apply questions of when, why, where, how to all paragraphs. Ask your real estate broker if they have a written test they could give you to make sure that you are comprehending the agreement. Study all addendums, exhibits and forms that can be added to the Purchase and Sale Agreement closely, applying the same questions as above to each and every paragraph. Study the MLS system so that you have a working knowledge of the MLS listing itself and the features of the system. Map out a few homes and then think what you will do to notify the seller that you are going to visit the home. Make a script and a process of how you will show the home, listing the steps from getting your lockbox key updated all the way to locking the house back up when you leave. Learn the mapping system that you will use. If you are using a GPS, map book or mapping software, make sure that you fully understand it’s flaws. Write a fake offer for a buyer pretending that you are representing them. Fill in all the blanks and ask yourself the questions that will represent this buyer well. This is where you ask your family members to help you. They make up a scenario and you represent them. Of course you are not going to send the offer to an agent. Study construction flaws of your area on the internet. However, remember that most state’s licensure for a real estate agent is limited to only the duties of an agent. This does not include making recommendations for repairs or being an inspector with your clients. Make a packet of information for your buyers showing that you are an expert and that you have thought of the information they need to make an education purchase.

If you do the simple things above, you will find that you will become an expert quickly. Almost everything you need to know is in the Purchase and Sale Agreement that your state uses. Many people attend continuing education and that is fine, but the rubber meets the road when you are an expert at representing your clients in a legal and binding document.

By: Rhonda Duffy