HomeVestors Knows How to Invest In REITs and REOs


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Get started in the real estate investment field by investing in REITs and REOs because it doesn’t require a great deal experience.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that we tend to mostly think of real estate investing in terms of the small businessman who buys and flips property, one house at a time.  This requires access to huge amounts of capital or at least an excellent credit score, unflinching dedication and superb business skills.  These alone are sufficient to deter most average people from jumping into real estate investing.  It is however possible to get into the real estate business with little or no business skills, and relatively little capital; by investing in Real Estate Investment Trusts (REITs), or REO companies.

Any individual can invest in the corporate world by way of purchasing stocks, bonds, mutual funds or REITs.  REITs were created by a congressional act in 1960, in a bid to make real estate investing accessible to the middle class.  A REIT is essentially a corporation that is by law, required to invest principally in real estate, and receives special tax exemptions in exchange for disbursing most of its earnings as dividends to investors.  There are principally two kinds of REITs that investors can put their money in.  Equity REITs that buy and own real estate for which they can earn interests through rents, and mortgage REITs that either buy mortgage-backed securities, or make mortgage loans.  Investors can purchase REIT shares by directly buying them in the stock market, or by putting their money in mutual funds that invest solely in real estate.

Just like REITs, investors can participate in the real estate market by investing in REO companies.  These are companies that buy REO (real estate owned) properties from lenders and resell them to the public for a profit.  REO properties are simply foreclosed properties that have not successfully sold at a public auction.  They are then handed over to an REO asset management branch of the owning lending company which among other attempted solutions, may contact REO companies and offer them discounts on their existing REO inventory.  REO companies get very good discounts since a lot of repossessed houses need some renovations before they can be sold again.  Banks have no interest in holding on to lots of foreclosed properties that may be very costly for them to keep and maintain.  Banks are sitting on such properties in their thousands as a result of the foreclosure crisis, and this has led to a proliferation of REO companies.

For investors who have neither the know how nor the stomach to buy and sell real estate, investing in REITs and investing on REOs, may be their foot in the door to real estate investing.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties.  Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community.  In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction.  For more information, visit www.HomeVestors.com.

 

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