http://www.ebiconsulting.com/services/due-diligence/portfolio-environmental-management.html | Minimizing risk is of great important to anyone in the business of real estate. Read on how environmental consultation can make a significant contribution to the risk management of properties.

1. Environmental Consulting Helps REO Portfolios Minimize Risk
Real estate owned properties provide bargains for real estate investors, allowing them to snatch
up undervalued properties at low prices. They can be tough for banks to unload, as many have
serious structural or environmental problems. Environmental management services can help
holders of REO properties do the environmental work needed to sell these properties to
investors.
What Are REO Properties?
REO properties are properties owned by lenders. The buyers of the property were unable to meet
mortgage requirements, and the lenders foreclosed on them. However, the lenders were unable to
sell the properties at auction, typically because the amount owned on them was greater than the
value of the property. As a result, the banks and other lenders are stuck with the property. The
mortgage service of the property, usually the bank that approved the mortgage on the property,
will be responsible for safeguarding it and making it ready for sale.
REO properties are typically in bad shape and will need rehabilitation to comply with building
and upkeep codes, and to make them attractive for sale or rent. Common rehabilitation tasks will
include securing the property, removing debris, cutting overgrown grass, roof repair, and
safeguarding any swimming pools.
Environmental Issues
In addition to these tasks, owners of REOs will likely have to deal with environmental issues.
Many REO properties have issues such as water or mold damage, chemical spills, hazardous
waste, etc. that may make them dangerous. Leaving these issues unresolved can impact the rental
or resale of the properties and could also result in legal liability.
Some typical environmental issues in REO property include:
Mold and water damage
Former use as a meth lab
Asbestos
Lead paint
Oil or fuel tank removal
Biological hazards
Hazardous chemicals
Septic problems
Contaminated wells
Gas leaks or related problems
Using an Environmental Management Consultant

2. Working with an environmental consultant can help holders of large REO portfolios handle the
burden of dealing with environmental remediation issues. With a consultant’s services, holders
of large REO portfolios can ensure properties have been thoroughly examined, and that needed
remediation has been done in a cost-effective manner.
Environmental management consultants can:
Provide necessary training and education to clients concerning environmental issues with
REOs.
Ensure that liability from environmental hazards to clients is minimized, and that
properties meet state, local and federal rules.
Evaluating properties and suggesting appropriate remediation action.
Help find contractors to complete environmental remediation work, lending an expert eye
to the selection process.
Working with environmental regulators to provide all necessary documentation and to
answer questions they may have.
Overseeing environmental remediation to ensure the job is done properly.
EBI Consulting has worked with many holders of large REO portfolios to help them get
properties up to par at a minimal cost. The company has a database of experienced, cost-competitive
contractors with a good work history in remediation. REO portfolio holders should
take advantage of the expertise offered by this environmental management consulting firm to
quickly unload REO properties.