Final Decisions when Managing an REO Property

In Part 1 and Part 2 of this blog series, we discussed what a real estate owned (REO) property is and the specific tasks an asset manager will perform to improve the overall appeal of the property. In this final post, we will evaluate the next steps after the property is repositioned.

As an asset manager, you are responsible for assisting in all aspects of the administrative, financial, capital, and operations of the assigned portfolio, in this case an REO Property. It is now your job to make decisions with respect to managing the property.

Management Decisions

Find a Property Manager

If the property manager in place is not familiar with the sale process of REO properties, this might be a good time to hire a firm that can ensure a successful marketing of the property.

Select a Leasing Agent

Selecting a leasing agent and a broker familiar with REO properties is pertinent. Ask about how many REO transactions they’ve handled, how recently, and inquire about their previous property addresses and what kind of results they were able to secure for their clients.

Develop a Marketing Strategy

A well-thought-out marketing strategy and schedule will help effectively advertise the property and attract tenants. Also, depending on the size and tenancy of the building, it may be helpful to hire an advertising agency to do this. This step may not be critical as the leasing agent for smaller properties may assume advertising costs as part of the contractual obligation of the listing agreement.

Evaluate the Property's Curb Appeal

You may consider changing the name of the property, the decor, the style, and possibly the lobby to create a new image. Whatever the case, the stigma of an REO property must be removed and replaced with the feel of a renewed property and image.

After all of these decisions and changes have been made, the asset manager will need to keep a close eye on the property and the property manager to prevent another foreclosure.

This article is Part 3 and is adapted from BOMI International's Asset Management course, part of the RPA® and FMA® designation programs. More information regarding this course is available by calling 1.800.235.2664. Visit BOMI International’s website, www.bomi.org.

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