REO listings are nothing more than foreclosure that are using a less known acronym.
REO stands for “Real Estate Owned” and is the term that the mortgage holder uses to identify homes that they have foreclosed on and they are holding in their inventory.
These “REO listings” are held in the banks inventory for as short a period of time as possible because a Bank or lending institution does not want to own Real Estate and until recently, rarely did. Banks and lenders do not possess the infrastructure needed to maintain, market and sell these foreclosure properties, especially at the volume they are experiencing currently.
Compared to only a couple of years ago, lenders are carrying 300% to 500% more foreclosures in their inventory. So what they couldn’t manage before has become nearly impossible to manage today. Before the house is foreclosed on, vacated and becomes a REO listing it is considered a pre-foreclosure. Pre-foreclosures are historically bad investments for a number of reasons. Once a home becomes a REO property this is when it is the most effective to spend your efforts on making a purchase of the property.
To find out why pre-foreclosures are bad investments read: Pre-Foreclosure.
Michael Urbanski is a successful entrepreneur with extensive experience online as the CEO/founder of Heavy Hammer since its inception in 1998. Heavy Hammer has several profitable online platforms for local advertising. Michael also owns several patents for geographic advertising online and has numerous other patents in process. Before launching Heavy Hammer in 1999 Michael was the top salesman for foreclosure homes in the state of Maryland. Among his accomplishments Mr. Urbanski has been a decorated Air Traffic Controller in the Air Force, a successful restaurateur and has written and produced several award winning feature films and top tier video games. Leveraging the success of his previous ventures and experiences, Michael self-financed and launched Heavy Hammer which has been profitable every year of the 12 years it has been in operation.
I am interested in Foreclosure cleanouts. I would like to start a business. Can you tell me how i go about getting the contracts and bidding on them
Michelle,
As it so happens I used to have the contract to clean out homes for the Federal Government in the state of Maryland. The system has changed since then but the end result should be about the same.The first thing you need to do is find the M and M contractor in your area. M and M stands for Marketing and Management company. Then go to their website and find where they accept contractor applications. Very often these contractors are signed up for a year at a time but they can always accept new ones, so don’t let that deter you.
Follow up with a phone call…or two…or three and try to create some relationships within the M and M company. Remember that what you are trying to do is make their lives easier so you had better have you ducks in a row. Start your company now (legalzoom) and get your recommendations together beforehand. It is hard to sell yourself as a reliable source to hand work to if you have no track history. The work is hard and sometimes you will lose money on a home as it has too much garbage in it but other times you make great money when the home has been properly vacated.
Good Luck with your new venture!!!