The REO – Rental-to-Own Joint Venture Program

The REO – Rental-to-Own Program started selling bulk housing to investors in February of this year, 2012.  What that means is REO homes, foreclosed homes, in the inventory of Fannie Mae is selling its inventory to investors.  The investor fixes up the house, if it needs it, then rents it out to someone with the idea that in 5 years or less the renter will be able to buy the home in a rent to own program.

What this means to the investor?  In the words of John Burns, bulk sales of REOs could be a “game changer” for the U.S. housing market.  We are talking about a huge transfer of wealth to a group of investors in the name of stabilizing the market.  We need to keep distressed transactions off the market and we need to make sure people don’t go homeless.  The Rental-to-Own initiative solves the problem.  It will take a good property management team in place that knows the federal housing laws and can work with the renter/potential homeowner on how to manage their money and help them move towards homeownership, which will be federally mandated.

In rolling out this new program the government is also encouraging Realtors to get certified to work with the investors and the renters/potential homeowners.  The certification is called Real Estate Property Management Designation, REPM for short.  Investors buy the units but it’s up to the Realtor/Property Management Company to help set rental rates, setting future purchase pricing, the amount of rent that will be allowed to be used for purchase, making sure the home is maintained, fixing any and all problems with the property/renter and making sure the renter/home owner gets the education that will be required to purchase the property and stay in the home.

It is slowly making its way to different markets and it will only be a matter of time before it hits Colorado.  Give me a call and let’s talk about how to get in on this market.  The Real Estate Property Management, REPM, class has just had its 1st successful class in Denver to complete the class and gain the designation.