The IRS lists property it has seized and is offering for sale on its Web site.

Generally, there are fewer than 100 properties at any given time, and they are scattered across the country. The terms for each piece vary, but the IRS usually wants a 20 percent deposit with your bid and all cash at the time of the sale. Cash means cash, certified check, cashier’s check, or some similar form of payment. The bidding procedures also vary somewhat, but they arc outlined for each property. When you click on the notice, you are told whom to contact, the bidding procedure, and photos of the real estate are given.

The General Services Administration (GSA) sells surplus real estate owned by the government. This property is acquired from a wide variety of sources. Some comes from the Internal Revenue Service (IRS), which acquires property from people who don’t pay their federal income taxes. Other properties come from other agencies of the federal government. The Property Disposal Office of the GSA has the responsibility of selling property to the highest bidder. Sometimes you can get extraordinary bargains here.

The GSA usually sells its properties using two methods: sealed bid and public auction.

The housing crisis grew worse in May, as more than 73,000 American families lost their homes to bank repossessions, up a staggering 158% from the 28,548 households that were dispossessed in May 2007.

Foreclosure filings of all kinds, including default notices, notices of sheriff’s sales and bank repossessions, were up 48% from May 2007, according to the latest release from RealtyTrac, the online marketer of foreclosed properties. Filings increased 7% from April.

“May was the 29th straight month we’ve seen a year-over-year increase,” RealtyTrac’s CEO James Saccacio said in a statement.

making cash flow even/positive

Monthly rental income >= P.I.T.I.H.

My break-even point is *even* cash flow. The way I see it is that I can own a sharply discounted properties with nearly 100% bank financing. The rental income is even with P.I.T.I.H (principal, interest, tax, insurance and HOA fee). My cost is literally zero in owning this property. Over the long term, the principal will slowly get paid down. Rent will rise (that’s a certainty in high-inflation period). And eventually, price will rise. Even if I make no or very small monthly cash income, my long term benefit will be huge.

REOs with over-corrected pricing are located in working class or lower income neigbhorhoods. They are not necessarily crime-ridden or dilapidated areas. Before the subprime crisis, these places used to have median prices around 300K range. Now, banks put up fire-sales and depressed prices to 100K and below. We are presented with a rare profit opportunity that only shows up in a very special condition in history. I bet this opportunity may disappear in 12-24 months. To put it simply, the general market has not bottomed, but some over-corrected REO properties have hit bottom. For example, one property I am buying has the same asking price as that recorded in 1986 transaction from county tax record. All these billions of dollars of loss that banks are writing off are actually being realized from these fire-sales. Banks lose, you gain!