REO properties are kept by financial company REO asset management department. It commonly sold at a big discount (may be 30%) compare to market value.

Plenty investors are aiming for REO properties to bag big income. Why? It is as a result of banks are forced to accept these REO properties because of unsuccessful bid during a foreclosure auction, and banks always anxiously trying to get free of these properties as soon as possible and thus they are willing to sell it at a cost that far under market value. Sometimes the price is less than what is owed on the mortgage.

Although most banks will have a REO asset management department, normally they will engage qualified real estate broker who specialized in this REO field.

Beside the possible cheap price of the REO property, there are other benefits of purchasing a REO property in comparison with a foreclosed real estate.

The first primary advantage is that you may investigate the property before submitting an offer to the banks. By doing so, you will understand how big is the property and assess how much money you have to pay if the property needs to be repaired after successful transacted to you. This is normally impossible if you are purchasing a foreclosure real estate in a foreclosure auction.

Next, there is not necessary to wait for the bidding to open to start your offer as there is no auction date like in the case of buying a foreclosure property. You are able to do this at any time when you feel you are ready.
On top of that, as there are plenty foreclosure properties stacking up, the bank often will not able to approve all this transaction within a short interval of time. And so you have pretty much time and a very good chance to reap many good REO properties from the bank's REO inventory.

Nevertheless, you have to take note that the bank REO asset management department in most cases will take a number of months to wrap a REO transaction. And generally you have to folk out your own money to fix the REO property after purchased as the bank will not sell it in good condition.

Basically if you have prepared your homework properly and have chosen the real estate cautiously, procuring and selling a REO property is a good investment that can earn you a great sum of money.