Private investors REO

Private investors REO

Of course prying a property from REO inventory does not guarantee that it will be productively reused. That decision is ultimately the purchaser’s. Several types of for-profit investors may acquire property out of REO:
• Rehab investors intending to improve the physical condition of the property in order to sell or lease it.
• Investors intending to subdivide a property (legally or illegally) to rent several units to tenants.
• Short term speculators who acquire properties at rock bottom prices intending to “flip” them after little or no improvement of the property.
• Long term speculators who acquire properties to be leased to tenants until resold.New homebuyers purchasing the properties for their personal residences.
If, like a typical institutional REO holder, a speculator purchaser keeps the property vacant while waiting for resale, the sale out of REO does not mitigate the potential for negative impacts. In fact, if the investor does not have, or is unwilling to commit, the capital necessary to responsibly maintain the condition of a property or even pay its property taxes, the sale out of REO can speed a property’s decline and transformation into a neighborhood disamenity.

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