Foreclosed multi-family, REO, Lender Owned properties. This used to be the domain of very savvy real estate investors, but no longer.
At least until the market changes and the sentiment changes, REO | Lender’s are simply just like any other seller, just that they are more motivated then a regular seller and they have no emotional attachment to the property being sold: it’s all about the money and results with no sentiment.
Since the bulk of the active properties are REO | Lender owned, buyers should not or can’t ignore them. Buying a lender owned multifamily property is pretty much the same as a regular sale. You don’t need special education, you don’t need anything different then a normal purchase.
Most of the time the sale involves several additional documents and in most cases you should be willing to buy the home without disclosures and in as is condition which may be downright nasty to perfectly clean and move in ready, just like a normal sale. With multifamily homes the difference is that you’re buying a business and often that business is devastated and without a cash flow: many of the lender owned properties are vacant and in need of lots of repair. Calculate that into you offer as vacant properties in need of even minor repairs can actually end up costing more then a well running business.
What you do need is an agent that can make sure you don’t overpay – because not all lender owned properties are super deals: some are over priced – to guide you through the additional paper work and to manage the transaction properly.
Treat lender owned properties just like any other purchase, just know there is no emotions from the lender: simple clean contracts and proof that you can close the transaction.
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