How To Break Into The REO Industry for Real Estate Agents

How To Break Into The REO Industry for Real Estate Agents

Are you interested in working in the REO (Real Estate Owned) industry? Do you want to know how to get started in this field and earn up to $100,000 a year? In this episode, we will discuss some tips and strategies for working in the REO community, as suggested by Rusty Smith, a hud broker who was featured on The Freedom Chasers Sixfigure Strategies podcast.

To begin with, Rusty Smith suggests that one of the most effective ways to start in the REO industry is by doing Broker Price Opinions (BPOs). A BPO is an estimation of the value of a property, which helps agents to learn how to price properties and generate income. By doing BPOs, you can establish relationships with asset managers who can use you to list their REO properties. According to Rusty Smith, doing BPOs is a good building block and can help you earn up to $100,000 a year if you know the right people.

Apart from doing BPOs, it is also important to have a good team of contractors, lenders, and locksmiths. As an REO agent, you will be responsible for managing the properties and ensuring that they are in good condition before they are listed. Therefore, it is important to have reliable contractors who can handle repairs and maintenance tasks efficiently. Additionally, it is important to be knowledgeable about different programs such as HUD's FHA program, which can help you to sell properties more easily.

Another important strategy for working in the REO community is to create a hit list of companies that own REO properties in the area and reach out to decision-makers individually. Instead of sending out mass emails, it is better to establish personal relationships with asset managers and other key players in the industry. You can also offer free BPOs to asset managers as a way of demonstrating your expertise and building trust.

It is also important to understand the concerns and liabilities of banks and financial institutions with regard to their REO properties. As an REO agent, you will be responsible for ensuring that the properties are in compliance with all applicable regulations and that the buyers are aware of any issues that may affect the property's value. Therefore, it is important to be knowledgeable about the disclosure requirements, restrictions, and timelines associated with REO properties.

In addition to building relationships with asset managers and other key players in the industry, it is also important to educate other agents, lenders, and appraisers about the REO process. By doing so, you can help to ensure that the properties are priced accurately and that buyers are aware of any issues that may affect the property's value. However, it is important to avoid using certain words that may lead to a property being rejected by Fannie Mae. For example, instead of using the word "mold," it is better to use the term "discoloration."

In conclusion, getting into the REO industry requires a combination of knowledge, expertise, and personal relationships. By doing BPOs, building a reliable team of contractors and lenders, and establishing personal relationships with asset managers and other key players in the industry, you can become a successful REO agent and earn a good income. However, it is important to be aware of the regulatory requirements, restrictions, and liabilities associated with REO properties and to educate others about the process. If you are interested in pursuing a career in the REO industry, take the time to do some research, find out who is selling in your area, and establish relationships with the banks.

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Don't forget to reach out to Rusty Smith:
Linkedin: https://www.linkedin.com/in/rusty-smith/
Website: https://7cities.1stclassrealestate.com/
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