Many investors doing flipping deal are also the foreclosure experts who takes lenders out of properties they don't want to own. These properties are often called REO—Real Estate Owned. No lender wants REO properties on its books. Why? Because a lender's business is to accumulate money and then lend it out on safe loans to earn interest. The interest
earnings are shared with the suppliers of money. Such suppliers are people who put their excess funds into savings
accounts, bonds, and similar holdings.
No lender wants to own property! Every lender wants nothing more than to receive a check on the first of every month for
the repayment of a mortgage loan the lender made. That's "lender heaven."
How to Be a Hero with Lenders? You can be a hero to any lender by:
* Agreeing to take repossessed homes off the lender's hands.
* Relieving the lender of an intense problem, often at zero cash
* Having all closing costs paid by the lender because they have an in-house legal staff and the work doesn't cost them
much.
* Flipping the property for a profit for yourself and making the lender happy because it no longer has REOs on its
hands.
With zero cash down for REO properties you have the ultimate in creative financing. And—happily—many lenders will not
even check your credit when you take over an REO property. The lender is so happy to get rid of the REO that a credit check is overlooked. So if you're into fixing up houses and selling them, check out REOs. You'll often find them listed in your Sunday paper real estate section.
You can, of course, work with a house mechanic and have that person do the fix-up. Then you share a small portion of the
profit with your mechanic. This allows you to do the financial planning for your future purchases.