The Importance of REO Research

When doing REO research, finding buyer is the most important step. If you don't have buyers already lined up for your REO properties, you might miss out on potential deals. This is actually more important than REO research on actual properties because there are so many properties, it is not difficult to find one quickly.

Without knowing who your buyer will be, it will be very difficult to move your properties whether you are wholesaling, rehabbing, or renting out. However, REO research for buyers will focus your research because you are looking for a property you know for sure someone wants, rather than just hoping someone will want your property. If you have a solid buyer's list it will help you out a lot in the long run.

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REO Research should always include ARV research. This is because you need to know what your price points are so you know how much profit you could potentially make from your deal. This also helps you determine where your offer should come in at.

You should use free sites to compare home values. Zillow and Trulia are great resources. One of the best resources for determining ARV is InvestorComps. They give you comprehensive comps and property information that will help you quickly and efficiently determine the ARV so you can make your offer.

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This may seem obvious, but you must do REO research on repairs. This will help you accurately determine how much repairs your property needs, thus making it easy for your investor buyer (or you if you're rehabbing) to see how much to buy at. Repairs that are off by thousands will really hurt your profit margins!

To do REO research on repairs, first get a ballpark estimate from the realtor. They should know, but they might also be off by several thousands. This is just to get starting point.

Next, find 3 contractors and get estimates. Analyze the three to see what the general consensus on the repair amounts would be. If you can't determine it from those, get more estimates. This should give a pretty accurate assessment of the repairs.

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