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Real Estate Owned (REO) is real estate that a bank or other financial institution has acquired through foreclosure and put up for sale to the general public. Lenders try to sell REO properties "as is." Real estate owned or REO is a term used in the United States to describe a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction. A foreclosing beneficiary will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount. If there are no bidders that are interested, then the beneficiary will legally repossess the property. When a bank or lender repossesses a property and holds it in its inventory, the bank or lender will often try to get rid of the property as soon as possible. Lenders will try to sell the property to the public at a price that will recover the unpaid loan amount. Often the asking price of the property is typically going to be the market value of the property or less. Saving on the commission by not using a realtor is possible when it comes to REO properties, often a small discount on the market value of the property will be seen, this is because if the property is in bad condition or not, the bank or financial entity that owns the property will not make any repairs or guarantee the condition of the property. Auction companies and auctioneer will have the opportunity to earn a commission by facilitating the sale of REO properties. Normally, the commission agreement will be between the auctioneer and the bank, government agency, or government loan insurer.
As written by yahoo! finance: "Investing in real estate can be tricky. One way to do it is through REITs or real estate investment trusts." REITs are companies that own, operate, or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REITs. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors.
F/m Investments CEO Alex Morris states that industrials are the best bet for REITs