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REO” acronym means “Real Estate Owned” properties. REO properties are known as bank owned residential property, bank REOs, house foreclosures, etc. “REO companies” are businesses that deal exclusively with these investments. Foreclosure has been all over America for the past couple of years.

This phenomenon is expected to continue unabated for the next 2-3 years or longer. As a result, foreclosure property investment has become an industry unto itself.

There are several homes in various stages of foreclosure. As a result, companies that are completely dedicated to the acquisition and resale of REO & bank owned residential property have been springing up all around the United States.

They are called “REO companies” or “REO asset management companies”. As foreclosure properties were just beginning to pull up headlines, various investors and real estate professionals began to approach banks and lenders for their lists of bank REOs.

After these banks supplied these lists, they will also provide the selling prices that they would allow for those homes.Making a foreclosure property investment was basically an informal process done on a bank-by-bank, house-by-house basis. But, that changed when foreclosures began to sweep across the US like a tidal wave.

Banks and other lenders were inundated with foreclosure properties every week and began to seek means to eradicate their losses and take away these bank REOs. American entrepreneurial spirit, specialized new companies began to take shape.

These new “REO companies” deal only with “distressed” real estate, including bank owned residential property, homes in various stages of foreclosure and homes that are in jeopardy of foreclosure. A lot of businesses that like to consider themselves as “REO asset management companies”. However, most are not making any money.

This is because they lack one or more of the following: experience, strong management, funding/cash flow, relationships with banks and lenders, networks of realtors, contractors and appraisers, etc. However, the REO companies those are profitable have ALL of these attributes and proven business processes as outlined below: