An REO is real estate owned by the bank, and many investors consider an REO property to be money just waiting to happen. An REO is different from a foreclosure property in that the bank has already tried to sell it at a foreclosure auction and has had no luck getting bids. Because the property was not bid on, the bank then became the owner of the property. Naturally, the bank does not want to keep the REO any longer than possible, and this makes it a great opportunity for an investor. Not every REO is a good deal, but when you look at an REO you’ll commonly find that there is a lot of money to be made.
So, is this a foreclosure?
Technically speaking, the home was foreclosed on because the owner of the home failed to make their scheduled payments. The bank set up and went through a public auction, but there was not any bids placed on the home, so the bank ended up owing the property. Yes, the home was foreclosed on, but it is well past the foreclosure process and the bank will be anxious to get rid of the property.
Advantages of REO vs. Foreclosed Property
When you are thinking of buying an REO you have to distinct advantages that a buyer does not have with a foreclosed property. The first is that you are able to buy on your schedule, as you do not have an auction date to work with and around. You can make an offer of the home any time; you don’t have to wait for bidding to begin. Another big advantage of an REO compared to a foreclosed property is that you can inspect it before you buy, when you cannot do this with the majority of foreclosed homes that you think about purchasing. Being able to inspect the property before you buy will let you know how big of a project you will be dealing with.
Best types of REO to purchase
You might not think the type of loan the home was purchased with the first time around matters but it does. You should attempt to purchase REO’s that had a conventional loan the first time around, as you will likely get much better deals with these than you will if you look at FHA and VA loans. The federal government backs FHA and VA loans, and the government can actually buy them back if they are so inclined. Homes that had conventional loans the first time are often purchased for just a fraction of their value, meaning that they can make an investor a lot more money.
Which REO’s you should not purchase
Just because the bank owns a property does not make it a good deal. In fact, when you see that a home or property is an REO you have to wonder exactly what IS wrong with it. The house was not bid on because no one saw the worth in it. Did the home just not have enough equity? Were their IRS liens against it? Was the property just too badly damaged? You need to ask these questions. If the bank cannot answer the questions then you need to be even more skeptical. Take advantage of your right to inspect the REO so that you can see with your own eyes what may or may not be wrong, hire professionals if necessary as well.
One must also be sure that if they are purchasing an REO to fix it up and sell it, that the property is located in a desirable part of town. If the home is not located in a desirable part of town, you should really think about how wise of an investment the property may be. Perhaps location is why the property was not bid on at auction. There are three big things to consider when dealing with any type of real estate and those are location, location, location. Never let a seemingly good deal let you lose sight of how important location is for any piece of real estate that you intend to sell.
Why the bank will sell an REO cheap
Basically, a bank is not set up to deal with real estate. Sure, they give loans to people, but really, they are not equipped to buy and sell real estate. Because banks are not accustomed to dealing with real estate, it often takes them awhile to get the ball rolling so that they can repair the property, and get an agent to sell the property. What this means is that while the bank attempts to get their business together they are losing money hand over fist and the federal government often penalizes them for each and every REO that they acquire.
Because the bank is loosing so much money on each REO, they are willing to sell it fast and cheap. In fact, banks commonly sell an REO property for around 30% of its value just to be done with it. Sure, they end up losing money on the deal, but they end up losing less if they sell cheap now than they would if they kept the property for another six months while they try to pull everything together so that they can sell the property.
The great thing about working with the bank with an REO is that you aren’t buying site unseen. Because you can walk through the house and make all the inspections that you want, you can deal with them in a way that will give you the best deal, and the bank will typically be happy with any serious offer because it will get the house off of their hand and they will stop losing money.
Generally REOs are a great investment as long as you know what you are getting into. The bank simply wants to get rid of these homes, and if you find the right property and are ready to make the serious investment, it can be a great way to get off and running in the real estate business.
Every year for the past ten years,the students of the WHU, Otto Beisheim School of Management in Vallendar/Koblenz, Germany, have held their own New Year’s Conference on finance. Putting internationally renowned speakers from the worlds of politics, academia and industry together with exceptional graduate and undergraduate students, the conference invites a thought provoking environment in which creative minds can interact and exchange concepts regarding finance in today’s global arena. For two full days, participants listen and learn, while engaging in friendly dialogue and debate about the issues most important to them all. The students work to prepare the conference in conjunction with Prof. Dr. Markus Rudolf, the Dresdner Bank Chair of Finance. Their goals include creating an atmosphere in which participants can discuss challenging issues, win insight into urgent topics in the realms of finance, and establish new contacts in the world of finance.
This year marks the 10th anniversary of the conference; and on January 14 and 15, it will be held under the title “Finance 2020 – Perspectives on Tomorrow’s Markets.” The conference is held entirely in English, and all papers presented will be in English. The list of the event’s sponsors holds some of the best known names in the world of finance, including Goldman Sachs, Morgan Stanley, Deutsche Bank, The Boston Consulting Group, Rothschild and more. It will be held on the school’s picturesque campus, on the banks of the famous Rhine River. The school is under an hour away from Cologne and Frankfurt and only a few miles from the historic old town of Koblenz. Participants will be wined and dined in style, and provided with first rate accommodations in a nearby hotel. For students, it’s an opportunity to mix with heavy hitters who have risen to the very top of their fields. For executives and academics, it’s a chance to share ideas with international colleagues and to be ignited by youthful passion.
The participants in this year’s conference have the exceptional good fortune of being joined by no less than three Nobel Laureates, the first of which is Prof. Robert J. Aumann of the Center for Rationality, The Hebrew University of Jerusalem in Israel. Born in Germany in 1930, Prof. Aumann fled with his family at the onset of the Holocaust and was raised in New York, where he attended Jewish day schools and received his undergraduate degree from New York’s City College and his doctorate in mathematics from Boston’s MIT. The following year he moved to Israel to join Hebrew University’s math department, and he has been there until today, over 50 years later. Twenty years ago he co-founded the university’s Center for Rationality. The center performs research using the concepts of Game Theory, and its members hail from every nearly discipline within the university. Prof. Aumann has written six books and scores of papers, and has served as visiting lecturer at some of the America’s top schools, including Princeton, Yale and Stanford. Of the numerous prizes and honorary doctorates he has received, the most outstanding is the 2005 Nobel Memorial Prize in Economics.
The second Nobel Laureate attending the conference is world renowned Prof. John F. Nash, Jr. Prof. Nash was born in West Virginia in the United States, the son of a teacher and an electrical engineer. He received his bachelor’s and master’s degrees at the Carnegie Institute of Technology in Pittsburgh, PA, following which he enrolled for his doctorate studies at Princeton University. There he wrote a dissertation entitled “Non-cooperative Games” inside which he published a theorem that became known under his name as the “Nash Equilibrium” theorem. He later worked at Princeton as a teacher, and at MIT as a science assistant. While illness prevented him from further publication, he has remained an avid mathematician and researcher. In 1994 he was co-recipient of the Nobel Memorial Prize in Economics for his work on game theory.
The third Nobel Laureate is Prof. Reinhard Selten, who was actually a co-recipient of the Nobel Memorial Prize in Economics in 1994 alongside Prof. John F. Nash. Born in Breslau, which is now a part of Poland but which was in Germany at the time, Prof. Selten received his master’s and doctorate degrees in mathematics from the Johann Wolfgang Goethe University in Frankfurt. He went on to build an enviable academic career, lecturing as a professor in universities throughout Germany and co-founding the International Academy of Sciences in San Marino. He became internationally known for his work on game theory and his research into bounded rationality, and is known today as one of the founders of experimental economics. In addition to his academic work he is on several editorial boards and is part of the lobbying efforts to introduce Esperanto as the official language of the European Union.
One of the conference’s esteemed corporate participants, Dirk R. Notheis is the CEO of Morgan Stanley Bank AG, and the head of operations in Germany and Austria. Dirk Notheis was a student at the University of Mannheim as well as at the University of Stuttgart, combining the study of philosophy with that of political science and business administration, earning a doctorate in business administration and a Diplom-Kaufmann degree. Following university, Dirk Notheis began working in the field of banking by signing on with SGZ Bank. Five years later he moved to Morgan Stanley, where he has remained ever since, climbing the ladder from head of various industries and the public sector, to ultimately serve in the bank’s highest position.
Dame Clara Furse DBE, who once held the position of Chief Executive of London’s Stock Exchange, is another valued guest at the conference. Dame Furse was raised on several continents before finding her way back to England, where she received her bachelor’s degree in economics at the London School of Economics. Following school she became a broker at the firm of Phillips and Drew, now known as UBS, rising to become first company director, then executive director, managing director and ultimately the Global Head of Futures. Two years later she left to become Group Chief Executive of Credit Lyonnais Rouse. Three years later she was appointed the stock exchange’s chief executive, a role she performed for the next 8 years. In 2008, she was named a Dame Commander of the British Commander for the important role she had played in the British Empire’s Financial Services industry.
Adding to the list of participants who hold the title of CEO in their companies, Karl-Georg Altenburg joins the roster. A wunderkind who in his mid-40s has achieved the inestimable honor of being named CEO of JP Morgan in Germany, Austria and Switzerland as well as the region’s senior country officer, Alternburg has also worked for Salomon Brothers investment banking firm and Arthur Dl Little, as well as at Inquam Ltd, where he served as CFO after cofounding the company. Highly educated, Altenburg has a doctorate in engineering and another in technical science. His love of the art world is expressed through his role as Curator of a museum in Berlin and member of one of Frankfurt’s most famous museums.
Alexander Dibelius joins the conference bringing with him a vast amount of experience not only in the world of investment banking but in the field of medicine. Studying to become a doctor, Dibelius received an MD and a PhD from the University of Munich back in the 80s. He chose to enter surgery, and became first a surgical intern and ultimately a practicing surgeon at Freiburg, Germany’s university hospital. Switching gears, Dibelius joined McKinsey & Co.as a partner, then moved to Goldman Sachs in 1993 first as an associate, but making vice president that very same year. Working his way up to managing director, Dibelius was named partner in 1998 and today serves as head of the company’s investment banking, with the additional responsibility of overseeing business thro
ughout Russia, Eastern Europe, Central Europe, Germany and Austria. Known for his widespread expertise, he has been solicited to serve in a supervisory capacity for a number of portfolio companies in Germany, and the German Banking Association has made him a member of their credit committee.
From the world of real estate comes Prof. Axel Wieandt, the Hypo Real Estate Group’s CEO and chairman of the board. Prof. Wieandt is returning to his roots in his attendance of the conference, in that he received both his master’s and his doctorate from WHU – Otto Beisheim School of Management. He followed these two degrees with a master of management from the Kellogg School of Management in Illinois, USA, and he has since parlayed all three into a highly successful career. After working as a consultant for McKinsey & Company, both in their US and Germany offices, Prof. Wieandt served for one year at Morgan Stanley in London and then at Deutsche Bank Group in Frankfurt as the Global Head of Corporate Strategy. There he rose in the ranks to ultimately become the Group’s Global Head of Corporate Development and Global Head of Corporate Investments. In addition to his corporate responsibilities, Prof. Wieandt returned five years ago to his alma mater to lecture the next generation of business students. In 2009 he left Deutsche Bank to become CEO of Hypo Real Estate Holding.
Indiana’s state capital is Indianapolis. It is a beautiful city that has a lot to offer especially when it comes to celebrities and famous inventions.
Indianapolis is Indiana’s capital. It is also Marion County’s county seat. In 2006, the estimated population of Indianapolis has reached 795,458. This is excluding the towns. This made Indianapolis, the largest city of Indiana and the United Sates’ fourteenth largest city. In the Midwest, it ranks as the 3rd largest city. It also ranks the 2nd most populous state capital, following Arizona ad Phoenix.
With the current diversified economy of Indianapolis, it contributes to the fields of healthcare, education and finance. Another vital part of its economy is its Tourism industry, especially since it hosts numerous sporting events and conventions. Amongst these, the most loved and popular is the Indianapolis 500 Race. Aside from this, they hosted the Men’s and Women’s NCAA Basketball Tournament as well as the Allstate 400.
Interesting Facts about Indiana
The 1st long-distance auto race was held here on May 30, 1911 at the Indianapolis /motor Speedway. The winner had an average of 75 miles per hour, bagging the 1st place with $14,000. The average speed is currently estimated to be more than 167 miles per hour, with the prize reaching $1.2 million. This has made the Indianapolis Motor Speedway the site for the greatest sports spectacle, the Indianapolis 500. This is held every weekend of Memorial Day, right along Hoosier capital city. It is about 500 miles or 200 laps long.
At the age of 7, Abraham Lincoln reportedly moved to Indiana, and he lived most of his boyhood in Spencer County. He lived with his proud parents, Nancy and Thomas Lincoln.
From Fort Vincennes, explorers Clark and Lewis set out to explore the Northwest Territory.
In Huntingburg, the “Hard Rain” movie was filmed.
The P-47 fighter plane was reportedly manufactured At Republic Aviation in Evansville and used during World War II.
In the year 1914, the Raggedy Ann doll was created by Indianapolis’ Marcella Gruelle.
On May 4, 1871, in Fort Wayne, they played the 1st professional baseball game.
On February 8, 1941, a popular movie star of the late 1950′s known as “James Dean” was born in Marion. He became popular for movies like “Rebel without a Cause” and “East of Eden”. Hence, at the age of 24, he died because of an automobile crash.
On April 12, 1947, the popular television host of “Late Show with David Letterman,” David Letterman was born in Indianapolis.
Santa Clause is city and namesake of the popular Christmas figure. The locals believe that the city receives more than half a million requests and letters during the Christmas season.
Indianapolis is where they publish The Saturday Evening Post.
Amidst the meaning of “Indiana” as the “Land of the Indians,” is it noted that there are no more than 8,000 Native Americans residing here now.
The “Circus Capital of America” was formerly Peru, Indiana.
In the years 1816 up to 1825, Corydon was Indiana’s state capital. When Indiana was still a territory, Vincennes served as its capital. Now, Indianapolis is its capital city.
The rapid-fire machine gun was invented by Indianapolis’ Richard Gatling in the year 1862.
Sarah Walker is one of the region’s first woman millionaires. She is more known as Madame J. C. Walker, and she started as a door-to-door saleswoman of her very own concoction of a conditioning treatment meant for straightening hair. Later on, she amassed millions with her invention.
In the year 1804, in Vincennes, the 1st newspaper of Indiana, Indiana Gazette was published.