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Author Topic: REO Occupied  (Read 11067 times)

Offline oceva

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REO Occupied
« on: November 16, 2014, 04:15:04 pm »
Hello,

I'm a new investor in real estate and there's a property I want to bid on an auction, I can't go see it because it says "REO Occupied, do not disturb tenant", should I stay away from these types of properties? What would the implications be? After my closing they will still there and I have to take care of the eviction process? Is it too risky?

I would really appreciate any advice or case study on this matter!!

Thank you!!

Offline javipa

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Re: REO Occupied
« Reply #1 on: November 16, 2014, 06:46:03 pm »
Who says you can't go to the property and see it?

There's a deadbeat inside.  Who cares?

Timid much? j/k
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Offline campbellsimon

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Re: REO Occupied
« Reply #2 on: November 23, 2014, 08:32:24 pm »
There are other ways around it. Get a hold of the assessor and ask for a copy of the assessors card. Do a search to see if the property was ever listed for sale. If it was, that should give you access to pictures of the interior. Park at the curb with binoculars and examine the roof line, foundation and window seals.

These will give you an idea of the condition. But, auctions have this degree of risk. Buying a home sight unseen can be too great a risk for some investors. You have to decide if you can handle it.
Simon Campbell - Business Analyst

Offline George Cornerstone

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Re: REO Occupied
« Reply #3 on: July 13, 2015, 07:17:39 pm »
Okay, so the bank owns the real estateÖ If the property is occupied, of course it doesnít mean you canít go see it from the outside.   If the property is really bad on the outside, itís usually bad on the inside. 

You minimize your risk because itís always good to see it from the outside so you can both get an idea of how itís like on the inside, plus you need to assess the neighborhood anyway.

Here is a good approach for trying to see the inside.   Bring a $10 Starbucks gift certificate.  Talk to the occupant. Be really polite.  Say something like this, ďHereís a $10 gift card.  Iím looking to purchase this home.  Iíd appreciate if you can answer some questions and maybe let me take a quick look inside.Ē   

Offer them the card firstÖ not explicitly as a condition of letting you in, just as an ice breaker.  They will probably give it back if they donít want to talk to you, but thatís not important.   

If you couldnít see inside, then youíll have to bid as if you have to do everything to the house (carpet, paint, new kitchen, new bathroomÖ etc.).

Hope this helps,  -George Krajacic
Loan Broker, Private Money Lender
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Offline AlanMerle

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Re: REO Occupied
« Reply #4 on: December 28, 2015, 05:17:19 am »
I really appreciate the idea given by George..
I completely agree with him.. If the property is not good from outside then it will not be good from inside..
Rest you can follow the idea given by him..But there is need of lot of patience..

Offline Dave T

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Re: REO Occupied
« Reply #5 on: January 06, 2016, 10:32:06 pm »
In some states, when a leased property is sold, the lease transfers to the new owner.  The new owner mush honor the terms of the lease.  You may not be able to evict, but instead you will have to decide whether you want to renew the lease at the end of the lease term.  If the property is on a month to month rental basis then you may be able to give your inherited tenant thirty days notice that you are terminating the lease.  Landlord tenant law in your area limits what you can do with an inherited tenant.  Consult an attorney in your local area for specific guidance.
« Last Edit: January 06, 2016, 10:33:57 pm by Dave T »

Offline dannyspastics

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Re: REO Occupied
« Reply #6 on: February 03, 2016, 12:29:51 am »
Well good question here it means, "Real Estate Owned" aka bank foreclosure.  There have been a lot of laws passed recently which give tenants rights, even in bank foreclosures. So, if the tenant has a valid lease in place, the bank may be required to allow the tenant to stay in the home throughout the lease. Some banks prefer to keep the home off the market during this period and some go ahead and market the home occupied. The tenant has rights, and you will inherit the situation as a buyer. They are still worthy of looking at, but you will want to know the current status of the tenants rights before making an offer.
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