A bank-owned commercial property is a commercial property that has gone through the foreclosure process and is more or less under the ownership of the bank. Banks can also take up ownership of a property via a deed in lieu of foreclosure. Have in mind that this type of property is also referred to as real estate owned (REO).
Immediately a bank takes up ownership of a property, it can list that property for sale. Home buyers or real estate investors can purchase bank-owned property, in most cases at a discount if the property requires substantial repairs or improvements to make it livable.
Banks are not always willing to hold REO properties on their books as they add to the bank’s risk. These properties are almost always sold at a discount since the banks are only looking to recover the amount of money that the borrower failed to repay in the past.
If no one is willing to purchase even at the discounted price, it simply means that the property has lost its value in the years between the issue of the loan and the foreclosure auction. Bank-owned properties can be alluring options for home buyers and real estate investors as they often sell at discounts. Commercial real estate investors can benefit from purchasing bank-owned properties in numerous ways.
The bank must have tried unsuccessfully to sell the real estate as a foreclose, and it wants to find someone eager to purchase the property, even if it entails selling the property at a much lower price. Coupled with saving money on the overall price, you might also find that loans for bank-owned commercial properties come with low-interest rates and down payments.
How Do You Find Bank-Owned Commercial Properties in Florida
Truth be told, there are not many valid options when it comes to finding active bank-owned commercial properties in Florida. Nevertheless, here are a few of the more competitive options to consider:
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Banks tend to have REO departments that are tasked with getting the properties off of the bank’s balance sheet as quickly as possible. This is because banks are not real estate investors; therefore, the sooner they sell the property the better.
This is the most labor-intensive option when it comes to finding bank-owned commercial properties, and the time and effort this takes can vary greatly according to your location. If you live in somewhere like Walton County, you can reach out to every major lender within a few days.
However, note that it will take some time for them to respond, after which you will need to comb through the listings to find properties that interest you.
If you live somewhere like West Palm Beach with a high population density and many commercial properties, you could spend weeks reaching out to lenders to get property lists. A subscription database makes it more convenient for you to find investment opportunities.
County Delinquent Tax Registries
The Florida Department of Revenue is mandated by law (Section 213.053(19), Florida Statutes to always put out the names of taxpayers who have large unresolved tax liabilities. Note that these taxpayers are yet to pay their debt. The list is updated monthly.
The list tends to include taxpayers who have unsatisfied tax warrants or liens totaling $100,000 or more. These foreclosure sales and tax deed sales are later carried out at the office of the Clerk of Court. The opening bid for such properties will be set at the total of all accrued unpaid taxes, interest, penalties, advertising costs, and administrative fees to the date of sale.
Multiple Listing Services
A good number of lenders in the United States have relationships with real estate agents to list and sell REO property on multiple listing services. When bank-owned properties are listed on the MLS, investors can work directly with the bank’s realtor or use a buyer’s agent to represent them in the purchase. These websites include;
- Reonomy: By aggregating data and insights on 50 million off-market properties across the nation, Reonomy guarantees that you can conveniently search any U.S. market and find bank-owned property owners before they reach foreclosure.
- Foreclosure Support: Foreclosure Support provides over a million bank-owned homes for sale – including multifamily and other residential property. Listings on their site include bank-owned homes for sale, as well as REO properties and auctions.
- BankForeclosuresSale: BankForeclosuresSale remains one of the most well-known listing platforms to find foreclosed homes for sale. The site is made up of a team of real estate professionals with over 30 years in the foreclosure industry.
- FarmFlip: Although the site includes farmland only, it includes active listings as well as those that have just been sold from a bank to the public.
- LoopNet: LoopNet currently boasts of more than 500 foreclosed commercial properties available on their platform, including retail, hospitality, and multifamily foreclosed properties, as well as land. LoopNet is a wonderful source place to find foreclosed commercial property and land.
- LandWatch: LandWatch provides thousands of bank-owned domestic and international land for sale listings. You can refine your search based on price range, parcel size, country, type (such as farms and ranches), availability, and sale type—either fixed price or auction.
- LandCentral.com: LandCentral.com strives to simplify the land buying process, priding itself on the headache-free approach of, “No realtors, no paperwork, and no hassle.”
- Zillow: Zillow is one of the renowned platforms for seeking residential real estate properties – including multifamily homes for sale or lease. You can find multifamily pre-foreclosure, foreclosure auctions, and bank-owned listings on Zillow’s platform.
- Land and Farm: This site includes commercial land, ranches, farms, and residential land, and also has a section strictly for land auction properties.
Tips For Buying Bank-Owned Commercial Properties in Florida
You need to understand that the more you know about bank-owned commercial properties before you buy them, the more likely you can make money from the real estate. However, protect yourself and your investment by following these five tips mentioned below;
Evaluate The Property’s Opportunities
You need to note that there is a possibility that the current state of a bank-owned commercial property might not serve your investment goals. You might need to invest some resources to improve the property’s value and ability to generate revenue. Most often, opportunities you should look out for include:
- Extra space or land you could use to expand or construct buildings
- Developments that will soon introduce more residents or employees to the area
- Infrastructure improvements that will more or less make it easier for people to visit the property
- Low-cost ways to improve the property and make it more attractive to tenants
Bank-Owned Homes Are Typically Sold As-Is
It is imperative you also realize that bank-owned homes are most often sold as-is. Banks ideally have little or no intention (or reason) to fix up the properties they repossess and this simply entails that experienced investors can negotiate a better deal.
If a property is listed as-is, then you will be expected to take responsibility for repairs and modifications, including problems that may not be apparent at the time of sale. However, the bank and real estate agent will be expected to list all of the property’s known problems. They will be expected to follow Florida and federal minimum disclosure standards.
You need to understand that working with large banks can be a tiring long process, and attempting to buy bank-owned homes is no exception. Owing to that, you should not expect anything less. Always be ready and willing to spend a good amount of time landing a bank-owned deal, as there are a lot of “hurdles to jump through.”
Create a Buyers Packet
Just as was noted above, bank-owned properties can often be bought at a significant discount, especially since banks would rather sell the homes at a discount than hold onto them. Owing to that, there’s almost always a lot of competition.
However, instead of falling behind the pack, you must put yourself at the front of the line to land the deal by putting together a buyer’s packet. Have it in mind that a thoroughly developed buyer’s packet will show the bank that you are interested in the offer.
Work with an Experienced REO Agent
Have in mind that purchasing bank-owned property is not the same as purchasing a home from a traditional seller. You need to realize that the two processes are unique, and those that are not well versed in working with banks may find that out the hard way. It is a good idea to work with an agent that understands how to navigate the process. Note that their experience could genuinely save you a lot of time and money.
Bank-owned properties can be quite alluring for real estate investors who are interested in buying bargains and turning them into cash-flow assets. However, you must conduct proper due diligence before you make an offer. Always work with your team—inspectors, contractors, and lawyers —to validate that your “fixer-upper” isn’t actually a “tear-down.”