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Bank owned properties (REO) purchase and resale tips

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  • Bank owned properties (REO) purchase and resale tips

    Has anyone purchased foreclosed properties owned by banks (properties that the banks are unable to sell at trustee sales at county court sale but are not listed on MLS yet) and tried to resell them or flip them after repairs?

    A friend of mine who is a realtor and has experience has some opportunities and is suggesting a potential partnership for investing in such properties. And what will be a good income sharing model if I am the only one investing money and the other party does all the work?

    Please share any experiences that you might have and things to know about before investing. Thanks in advance

  • #2
    In 2009 and 2010 I purchased 2 REO SFHs using a local realtor(not a friend). We also have a property manager who manages other other 2 units(we bought as new properties(not a great move btw)). She hired the appropriate people to fix them up. We pay her 8% of the monthly rent and 50% of the 1st months rent for new tenants.


    • #3
      Here is a short article from about REOs. I would suggest reading more on BiggerPockets if you are going to delve further into real estate.

      Article -

      As with any partnership, don't be afraid to ask them to give examples of their track record (i.e. pictures and numbers from previous flips in this case). I hope this helps!


      • #4
        I bought 2 properties REO in 2005 using a realtor. They were in a suburb of Indianapolis. They saw no appreciation for 10 years and then jumped 75% since then.

        Decent cashflow....bought sight-unseen...still haven't seen them, nor have I been the state.

        I'd do it again, except they're a bit pricey now.