Buying REOs is a very popular method of buying Santa Cruz real estate for investment. If you're just getting started accumulating investment property, this is one way you can get very good deals and amass a great deal of property quickly.
REO stands for Real Estate Owned and is the acronym banks place on properties they have taken back from mortgage defaults. REOs are considered non-performing assets meaning they have value but are not bringing in any money—bad for the bank, good for you.
Buy REOs at Foreclosure Auctions
Foreclosure auctions are a great way to get fantastic deals that you might not be able to convince a bank to go with prior to the event. Some savvy investors try to catch properties while they are in pre-foreclosure which avoids a property being bid up in an auction atmosphere. To do that, you often have to convince the holding bank to "short sale" a property and sell it for less than the note they were holding on it. At a foreclosure auction, the bank is usually desperate to unload the Santa Cruz real estate and often settles for far less than the actual value without all of the short sale paperwork.
Do Your Homework
If you choose to buy properties at auction do your homework. Use foreclosure worksheets to determine the true value of a property and what your maximum bid should be in order to realize a profit from its eventual sale or use as a rental. Doing this prevents you from getting caught up in the moment and over-bidding on a piece of Santa Cruz real estate that has a lot of competitors bidding on it.
If you would like more information on how to acquire REO properties, I can help. Contact me at 831.662.6522 or email me at firstname.lastname@example.org