YOUR QUESTIONS. ANSWERED.
What is another name for a preREO?
What’s the difference between a judicial and non-judicial foreclosure state?
A. 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.
B. 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.
What’s the difference between an REO and a preREO?
A) 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.
B) A preREO is a note that is in the process of foreclosure, but has not yet gone to sale.
Does preREO work in every state?
Yes. Our process typically works best in judicial states due to the length of foreclosure process but you’ll sometimes find assets in non-judicial states that have lingered in the foreclosure process for one reason or another.
Can I view listings before paying the participation fee?
You can view listings at any time once you register. You only pay a participation fee once you close on an asset.
How fast can I make a return?
It depends on the asset. If you have questions about a particular asset, please contact us.
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.
Who holds the title in the partnership?
The property owner holds the title but preREO holds the mortgage note. Once the partnership is liquidated, preREO will transfer the mortgage note to the local investor.
How does preREO source assets?
We source through a variety of lenders including AHP.
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. Prior to the preREO offering, these notes on vacant properties have not offered an opportunity to earn a return prior to the foreclosure sale.
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 are the credit requirements for preREO?
If the investor has the 25% down and the $2,000 program fee and states that they have the financial ability to continue with the foreclosure action, complete the receivership process and complete any repairs, preREO will typically fund the partnership agreement.
What fees are there for registering at preREO.com?
There is no registration fee for creating an account with preREO. However, if you choose to invest in a preREO, there is a $2000 program fee to be paid upon acquisition of the note. The local partner also pays 25% of the acquisition price and all legal fees, maintenance fees, and other costs incurred subsequent to their acquisition of a participation interest.
Do you structure the partnership beforehand or when you find an acceptable property?
You do not need to structure the partnership beforehand. We use a standard contract that is provided during the process.
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.
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.
Can I pay for the preREO in cash?
The investor participation amount needs to be paid in cash. The preREO participation may be paid off in cash after the initial closing, but we must close the original partnership first.
Do you offer financing for REOs?
If you are an investor, we request 25% down and will finance the balance at 9.9% for ten years fully amortized.
What states are preREO listings located?
Currently, we have preREOs in about 44 states but hope to serve the whole United States in the future.
How is the initial value determined?
The pre-discounted price is determined by a BPO. The BPO for your asset is typically in the files section of the listing. That said, you are able to get your own BPO if you see fit.
Why aren’t there more pictures for the listing I want?
Although we intend to provide users with as much information as possible, sometimes we do not get many pictures for the listing. What you see on the website is what has been made available to us.
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.
I am a realtor - Can I get these listings?
preREOs work differently from REOs in that they are not a listing on the MLS. As a real estate agent, you can prosper by offering preREOs to your local investor community as an affiliate or by acting as a receiver. If you are interested in learning more, please contact us.
What do I get as an affiliate?
As an affiliate with preREO, you are able to earn $300 every time that a person you referred closes on a preREO.
How do I become an affiliate?
To apply to become an affiliate for preREO or learn more about the program, please contact us.