What is an REO (Real Estate Owned)?

The term REO is used to refer to a piece of real estate (property) owned by a bank, and capitalists usually get excited at the thought of investing in an REO property since they consider it to be easy money making options. An REO is different from a foreclosure property in the sense that the bank has already tried to sell it at a foreclosure auction and has not been successful in getting bids, and following this, the bank then became the owner of the property because the property was not bid on. As expected, the bank is not too interested in keeping the REO for any longer, and this makes it a good opportunity to cash in on for an investor. However, it must be remembered that every REO need not necessarily be a good deal, but in general, it has been seen that when it comes to an REO there usually is a lot of money waiting to be made.