Contra Costa REO real estate sales are at all time highs.  The same is true all over.  REO property is starting to sell as the banks face the reality of the current housing market.

REO property is property owned by the bank because it did not sell at foreclosure.  The bank could not sell the property to cover all the debt encumbered by it, so it is now real estate owned by the bank.  REO property it is called.  According to Dataquick, year over year, Contra Costa REO real estate sales are up over 900%.  There are very very few areas in California, and not many nationwide, that are not in the same boat.

So what does that mean for you as a real estate investor?  If you have been waiting for the time to get back into the real estate market, we’re getting awfully close.  The banks are taking back record numbers of homes.  They know the real estate market is bad, and also do not want to keep these homes on the books.  They are starting to price these REO properties very aggressively in order move them.

According to Dataquick, fourth quarter foreclosures were the highest on record, 31,676.  The previous high, not counting this down cycle, in third quarter of 1996 was 15,418.  With all these foreclosures, and a glut of REO property, we are starting to see an excellent buying opportunity as the inventory and foreclosure activity begin to work their way back towards normal levels.

So are we at the bottom?  I don’t think so, but if you can find the right deal, it doesn’t really matter.  Three years ago, it was not possible to buy Contra Costa real estate for investment purposes and be cash flow positive.  The numbers are starting to shake out, and rents are headed higher, it is now possible to find cash flow positive single family residences in today’s market.  If you can get into a good neighborhood, with a nice property and be cash flow positive, you have the means to sit on that investment property until the market does turn.

Keep an eye on what is out there.  I suggest finding a good real estate agent who can update you as new listings come on the market.  You will have a good idea of what is available, and what the trend in pricing is.  Additionally, you should get financing lined up, so when you do find the property that meets your needs, you will be ready to move on it.  It is always best to get your financing options on the table early on so you know exactly what the numbers will be and whether or not you will be required to bring cash to the closing table.

With the banks holding record numbers of REO real estate properties, the opportunity for investors is here.  Start doing your research now, and you will be poised to take advantage of this unique time in real estate.  As always, feel free to contact me with any real estate finance questions!

Check back in often, I will be writing more about REO properties in the near future, offering my insight and advice.  If you are looking for REO property, or any real estate for that matter, feel free to talk with my wife, a Contra Costa real estate agent.  She can offer resources or refer you to an honest professional in your area.