How to Find Bank Owned Homes for Sale

How to Find Bank Owned Homes for Sale

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Real estate investing is, undoubtedly, one of the best ways to make money. But sometimes, it?s easier said than done. In order to invest in real estate, you first need to find a property for sale that is both profitable and fits within your budget. For beginners in the real estate industry, especially those with little money to invest, this can be a hard task to achieve. Combine that with the slim housing inventory in some markets in the US and you may believe that you?ve missed the opportunity to buy your first or next investment property. However, what if we told you that there?s a way to score a good real estate investment deal through learning how to find bank owned homes? If you?re interested in buying a bank owned home for real estate investing and want to know how to find one, just keep reading!

What Are Bank Owned Homes?

Have you not heard about bank owned homes before? You must be wondering what are they and what are the benefits of buying them as a real estate investor. Well, bank owned properties (also known as real estate owned or REO properties) is a term used to describe homes that are owned by lenders like banks, government agencies, or government loan insurers. Typically, lenders will foreclose properties after their owners have defaulted on their loan. They try to sell foreclosures to recoup a portion of their money but, if the sale was unsuccessful, ownership will be transferred back to the lender. Once a real estate property is transferred to the lender, they will put it on the market for sale as an REO and attempt to sell it again.

Related: Buying a Bank Owned Home for Investment: Pros & Cons

Benefits of Investing in Bank Owned Properties

While homeowners are attracted to bank owned homes, buying these real estate properties comes with a number of benefits for investors as well. First of all, due to the fact that they are sold in an ?as is? condition, REO properties are usually offered at discounted prices. Affordability is one of the features that real estate investors look for in an investment property as, generally, the lower the purchase price, the higher the return on investment in terms of cap rate and cash on cash return.

In addition, lenders don?t want to hold onto loans that aren?t producing returns and are more than willing to part ways with them ASAP. This and the fact that there are no homeowners to deal with ? meaning no emotional ties to the home ? is another reason why REO properties are priced below market value. This also shows you that lenders are motivated sellers and, thus, you can expect a fast transaction when buying bank owned properties. With good negotiation skills, you can score a fast bargain!

Not only that, but there are also numerous ways to find bank owned homes and turn them into money-making machines. What we mean is that there are many ways to invest in these properties. For example, you can follow the fix-and-flip investment strategy where you buy distressed REO properties, renovate or rehab them, and then sell them for profits. Another strategy is to buy a US bank owned property and turn it into a rental property that generates monthly rental income and cash flow.

As you can see, there are a number of reasons why real estate investors consider buying REO homes a smart investment decision. These are also reasons that should further encourage you to learn how to find bank owned homes for sale that could potentially be profitable investments.

5 Ways to Find Bank Owned Properties

Understanding what REO properties are and their benefits for investors is one thing, but you need to know where to find these deals. It?s actually quite easy to find bank owned homes for sale ? if you know where to look. Here are 5 ways to get you started with your search for REO investment property:

#1. Traditional Methods for Finding REO Homes

The traditional and most obvious way to find bank repos is by contacting banks and lenders directly. As mentioned, lending institutions want to get rid of these properties, so they?re willing to provide you with a list of their current REOs for sale. They also have sections on their websites dedicated to their REO listings. So if you can?t go to the lending institution itself, simply visit their website. Once you locate the page with their REO listings, you can search for the best property that meets your criteria based on location, type, price, square footage, and the number of bedrooms and bathrooms.

Related: What Should You Look At in an Investment Property for Sale?

Keep in mind that, depending on the bank, listings may change daily, weekly or monthly and the best bargains go under contract quickly. So, if you found a bank owned house with the potential to be a profitable investment property, be prepared to act immediately. You?ll need to perform a quick property valuation, inspection, and have your financing in place so you can submit your offer.

Other traditional methods to search for US bank owned homes for sale are to drive around looking for ?Bank Owned? signs and to check public records. These are good property search strategies if you?re investing in an area with a high rate of foreclosed homes which no one is buying. The downside, however, is that they can take valuable time and energy in addition to being available for anyone to view which makes it difficult to get a jump on the competition.

#2. Government Organizations & Loan Insurers

Banks and lenders are not the only institutions who can take possession of real estate properties. The government and, more specifically, government organizations can seize homes as well. Some of the best sources of government-owned listings include HomeSteps, the Federal National Mortgage Association (Fannie Mae), the U.S. Department of Housing and Urban Development ( HUD), the U.S. Department of the Treasury, and the Small Business Administration. Each of these government agencies has their website which you can check to see their REO listings.

Finding REO properties for sale this way is convenient as most agencies? websites allow you to search for properties in your housing market of choice by the address, the ZIP code, or the MLS number. So, if you?re wondering how to find bank owned homes near me, this is your answer! What?s more is that next to each REO listing, you?ll find the contact person or real estate agent who can show you the property and help you make an offer. While they don?t offer many details about the properties like some of the other ways to find bank repos on this list, they?re free to use and can give you the ability to find hidden investment opportunities that other real estate investors might not even know exist.

#3. Real Estate Auctions

Once you have searched for REO properties on REO Banks and Government Loan Insurer sites, you may want to look at real estate auctions. While many think that you can only find foreclosed homes for sale in auctions, that?s not always the case. Many auctions include properties in various stages of foreclosure including short sales and REO homes. Moreover, while some lenders or banks offer a single REO property for sale, others might sell these properties at auctions in bulk for cheaper prices.

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You can find the time and location of real estate auctions with the help of an agent, in local newspapers, or by contacting local governments directly or visiting their websites for information. A great thing about property auctions is that they can take place either live or online. The second option makes it easy for you to browse through REO listings from across the nation and buy an investment property in a profitable location without leaving the comfort of your home or office.

The way that live and online auctions work is pretty similar. The real estate investor has to register for the auction, submit a deposit as proof of funds, and place a bid at the time of the auction. If you?re the highest bidder for the bank owned home, you?ll win the auction and become the new owner of the property. One of the best tips to increase your chances of winning is to pay cash for the investment property. For more details, read Real Estate Auctions: Everything You Need to Know.

#4. Real Estate Agents and Brokers

Another option for finding bank owned homes for sale is to connect with a local real estate agent or broker in the housing market where you?re interested in investing in. A good agent will help you in your property search through a number of ways. First, there are real estate agents who work with lending institutions as listing agents specifically to sell their REO properties. Some brokerages also have an entire REO division and specialize in REO properties. If you?re on their email list, they?ll provide you with updates regarding REO listings along with information that isn?t always public.

Second, local agents or brokers are experts in the housing market, meaning they will know about foreclosed properties that are about to become bank owned. Moreover, a good agent will have an extensive real estate network. So, even if he/she isn?t an expert in REOs, they?ll most likely know other agents who sell such properties. Finally, keep in mind that agents, unlike real estate investors, have access to the Multiple Listing Service (MLS), which is a real estate database where all real estate for sale ? including REOs ? in a selected area is listed.

As you can see, working with a real estate agent is indeed one of the best ways of how to find bank owned homes for sale. In fact, all beginners in real estate investing are advised to have an agent or broker in their real estate network regardless of what type of property they?re looking to buy for investment. To find a top-performing real estate agent in your state or city of choice, click here!

#5. Real Estate Sites ? Like Mashvisor

Unlike the above methods of finding bank owned homes, using Mashvisor is the best way for real estate investors to find REOs that are guaranteed to be profitable investment properties! You can search for and find off market properties in the US housing market (including bank owned homes, short sales, foreclosures, and auctioned homes) using the Property Marketplace. You can customize your search to find properties in a particular city and neighborhood based on criteria including price range, property type, year built, number of bedrooms and bathrooms, and more.

Visit the Mashvisor Property Marketplace today and find the off market property you?ve been searching for!

The best part about using Mashvisor to find bank repos is that it allows you to analyze the properties you?ve found using the Investment Property Calculator. For investors, the quick process of buying bank owned homes makes it hard to do an investment property analysis. But, using our tool, you can quickly do an in-depth analysis using comparable data and predictive analytics. You can see what returns you can expect from the investment property (as a traditional or an Airbnb rental) in terms of:

  • Rental income
  • Cash flow
  • Cap rate
  • Cash on cash return
  • Occupancy rate

When you?re ready to start looking for and analyzing US bank owned homes for sale, Mashvisor gives you 14 days to try out our tools for free! To start out your 14-day free trial with Mashvisor, click here!

Originally published at on July 6, 2019.


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