Should I buy REOs?
REOs or Real Estate Owned by the bank or the lender are usually properties where the bank has foreclosed on them. So, should you consider buying these REO properties when doing the Nomad model?
My opinion is that if they would otherwise make a great Nomad property I would not rule them out. If you happen to find a great REO and you want to buy it, move in, live there for a year then convert it to a rental… that’s fine and approved by me.
However… I would strongly warn you… especially if you happen to be in a real estate market as hot as ours… that you do not wait around and focus on finding an REO to buy. The raw, very small number of REO properties available for sale will limit the number of properties you have to choose from and I’d rather see you buy a property that would be an ideal Nomad property. Do not wait for an REO specifically.
You may also want to read more about my thoughts on whether you want to focus on buying at a discount when doing Nomad. That is why I think many buyers want to look at REOs, short sales and foreclosures to begin with. I’ll give you the short version of my opinion on buying at a discount: it is not required, but can help the Nomad model in certain specific situations.