If you are investing in Real Estate, especially in bank owned properties, REO research should be one of the most important aspects of your business.
With the right REO research, you can generate large profits very quickly.
What, then, is good REO research? REO research is the process of gathering information on a certain property including how much the property is currently worth, how much repairs the property needs, and how much the property could be worth after repairs.
This involves calls to realtors, hiring BPO agents, getting estimates, etc.
That seems simple enough, so how can you do bad REO research? The problem that a lot of people find themselves in is one where they have a REO property under contract that they want to sell either to an investor or a retail buyer, but there is no one to sell to.
The main reason for this is that the REO property was not put under contract at low enough price points, which is a direct result of REO research.
Even though REO research involves finding out about a certain property, it also involves finding out what the buyer wants in terms of price points.
Often, an investor will look at a REO property and think that they have a great deal on their hands because they are able to put the property under contract at 50 cents on the dollar.
However, a rehab investor may only want to get into properties at 40 cents on the dollar.
That 10% difference is huge because what that translates to is lower profits for you.
Initially, then, REO research really has nothing to do with the property.
Find buyers and find what kind of properties they are looking for, then find the properties for them.
If you can find properties quickly and at the price points your buyers are looking for, you will easily make the kind of money in real estate investing you've been hoping for.