Unless you have an unlimited availability of cash, one of the biggest considerations of purchasing the REO property is financing. Real-estate investors always attempt to purchase properties with the least amount of cash out of pocket. The REO departments recognize this and expect offers from investors to have little out-of-pocket money required.

Not only are you looking for the best possible price for the property, but you are also looking for the best possible financing terms. Of course, it depends on what you intend to do with the property as to what kind of financing terms you want to seek. If you are planning to hold the property and rent it, then you want financial terms that will allow you to enjoy a positive cash flow each month. If you plan to flip the property, then a balloon payment in a year or two will not concern you since you will no longer own the property.

It is often possible to acquire attractive financing, especially if the lender is anxious to sell the property. Turning a defaulted loan into a performing loan is often the most attractive offer you can make to a lender.