Your Questions. Answered.
What is a preREO?
A preREO is a delinquent first mortgage secured by a vacant property, typically a single-family home or condo.
What is another name for a preREO?
What’s the difference between a judicial and non-judicial foreclosure state?
- In a judicial foreclosure, the lender files a foreclosure lawsuit in court and the homeowner receives a summons and foreclosure complaint. Foreclosures are generally judicial in the following states: Connecticut, Delaware, District of Columbia (sometimes), Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana (executory proceeding), Maine, Nebraska (sometimes), New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma (sometimes), Pennsylvania, South Carolina, South Dakota (sometimes), Vermont and Wisconsin. Judicial foreclosure can last anywhere from six months to about three years depending on the state.
- In nonjudicial states, the deed of trust authorizes a trustee to foreclose on the property if the homeowner defaults on their loan. These actions are typically completed outside of court and are relatively quick compared to a judicial foreclosure. Foreclosures are usually nonjudicial in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia (sometimes), Georgia, Idaho, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico (sometimes), North Carolina, Oklahoma (unless the homeowner requests a judicial foreclosure), Oregon, Rhode Island, South Dakota (unless the homeowner requests a judicial foreclosure), Tennessee, Texas, Utah, Virginia, Washington, West Virginia and Wyoming. Nonjudicial foreclosure can usually be completed within a few months.
Can I live in a preREO?
Unfortunately, you cannot live in a preREO during the foreclosure process. However, if you acquire the property AFTER the foreclosure process is complete, you are welcome to move in.
What’s the difference between an REO and a preREO?
- An REO, short for “real estate owned”, is the term for a property owned by a lender that did not sell at a foreclosure auction after the mortgage owner defaulted.
- A preREO, on the other hand, is the mortgage status before it becomes an REO.
THE preREO PROCESS
How long does it take to get started on preREO?
It only takes a few minutes to register and start looking for your ideal investment.
Why do I need to pay you to find preREOs? Can’t I just do that myself?
preREOs are directly sourced from lenders and not listed on the MLS. preREO is providing a unique opportunity for investors to partner on the mortgages secured by vacant properties and generate investment income during the foreclosure process. Up until now, these notes have generally been unavailable to the general public and most investors.
Why do I need a receiver? Can’t I just do that myself?
To legally take possession of the property to begin repairs and collect rent prior to the completion of the foreclosure action, the court-appointed receiver is a necessity. The receiver can be anyone the court appoints, typically a local real estate agent, property manager or contractor who the local preREO partner recommends.
Can I “rent to own”?
We currently do not offer that option.
How long does it take to acquire a preREO from a lender?
preREO partners can typically acquire their participation interest in two to four weeks.
What fees are there for registering at preREO.com?
There is a $2,000 program fee to be paid upon acquisition of each note.
Okay, I’m ready to make an offer. What do I do?
Register and find the asset; then simply Submit an Offer to begin the process.
What if my offer is rejected?
Try again and feel free to communicate directly with the seller. We don’t limit the number of offers you send (but please be reasonable).
What support does preREO provide after closing?
This preREO is not what I expected, can I get a refund?
We do not offer refunds and encourage that preREO partner complete due diligence prior to acquisition.
Can I pay for the preREO in cash?
Institutional sellers typically do not want to sell to individual investors.
How does “financing” work with a preREO?
As an investor, you contribute 25% of the asking price, preREO will fund the remaining 75%. There are no origination or other fees associated with the financing, and preREO is entitled to a return of their investment plus 12% annually. Local partners earn everything above this amount.
Do you offer financing for REOs?
We offer non-owner occupied financing at 9.9% for 10 years. Typical down payment is 25% but that is negotiable.
What states are preREO listings located?
Currently, we have preREOs in about 30 states but hope to serve the whole United States in the future.
Why aren’t there more pictures for the listing I want?
Although we intend to provide users with as much information as possible, sometimes there are circumstances that affect how many photos are available such as the owner not being local or currently not being able to take photos due to it being occupied.
Why can’t I see exactly where this preREO property is located?
Once you register for the platform and log in, you will be able to see the exact address of each preREO.
Do you offer land contracts?
Can I schedule a tour?
Unfortunately, we are not able to provide either in person or video tours at this moment. However, we may be able to provide access via lockbox.
How can I get my preREOs listed?
For lenders that want to partner with preREO, please contact us. There is no charge for selling on the preREO platform.
How often do you add new listings?
We are continually adding new listings to the platform.
Can I purchase REOs on your site?
Yes, simply go to Search REOs to see available inventory.
What does it mean if the REO property says it’s “Occupied”?
When a property is occupied, it may be the prior owner or tenant. In some cases, we may allow the occupant to remain for a short period until they vacate. In other instances, we may be in the process of eviction. For more details, please contact us.