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TR U M P STR A TEGI ES FO R R E A L ESTA TE

are high, look for sellers with VA mortgages originated when
rates were lower. And just like FHA no qualifying assumptions,
the VA loan is easy to qualify for and less costly than originat-
ing a new loan.
9. Real estate owned (REO). REO is a term commercial lenders
(such as banks or savings and loans) use to describe their in-
ventory of foreclosed real estate. A large multibranch savings
and loan, for example, would have an REO department that
would oversee and manage its holdings. Should a lender fore-
close on a house, for instance, the owner or tenant of the house
would immediately be evicted. Then, the lender (who is now
the new owner), would secure it, and would eventually put it up
for sale. More often than not, these properties are sold at bar-
gain prices with great terms. Your job should be to make a
thorough search of these REO managers and get a list of their
inventory. You could also find out who the realtors are who
make it their business to sell a lender’s REO.

SUMMARY

The content of this chapter may overwhelm the small real estate in-
vestor, but don’t give up. There are still fortunes both large and
small to be made in real estate. Traditionally, real estate values in-
crease at a rate equaling or exceeding inflation. Real estate is a lim-
ited commodity and each piece is unique. If you make some bad
deals, remember everyone does, including Donald Trump. It is true,
however, that you will learn much more from your failures than you
ever will from your successes.

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