“REO companies”, are those who deal exclusively with REO investments. REO” means “Real Estate Owned” properties. REO properties are known as bank REOs, bank owned residential property, foreclosures, etc.

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 is a huge number of homes in various stages of foreclosure. This is the reason why a number of companies and businesses are dedicating their time in the acquisition and resale of foreclosed properties all over the country.

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

Selling prices of each house is included in the REO listing provided by the bank. Buying foreclosed properties used to be an informal process but soon change when foreclosure become prevalent all over the country.

Specialized companies began to sweep the country due to the increasing number of properties that banks and lenders would want to get rid off.

These specialized companies deal with “distressed’ real estate including bank REO, foreclosed and soon to be foreclosed properties. Several companies consider themselves as “REO Asset Management Companies”. However, most of them do not make any money. They lack one or more of the following: experience, funding/cash flow, strong management, relationships with banks and lenders, networks of realtors, contractors and appraisers, etc. Profitable REO companies have all of the mentioned attributes and proven business processes.