Lender-owned real estate is a non-earning, classified asset. It bleeds non-interest expense — taxes, insurance, maintenance, management — while value erodes and capital sits trapped. This tool totals that drain, per year and over your hold.
Estimates only, for illustration; not financial, legal, tax, or accounting advice.
Holding OREO has three cost layers, all running against the institution every period:
All-in annual cost = value × (tax% + insurance% + maintenance% + management% + decline% + cost-of-capital%)
Multiplied by the hold period to total the drain. The figure is the recurring cost a cash sale eliminates immediately — separate from, and on top of, any discount to value.
Direct carrying costs — taxes, insurance, maintenance/security, management, legal — hit non-interest expense each period; on commercial property these commonly run 8%–15% of value per year before any value decline, plus the opportunity cost of trapped, non-earning capital.
A cash sale ends the carrying cost and write-down risk the day it closes, frees the capital and reserves to redeploy, and removes a classified asset from the books. Compare a sale against a continued hold with the loan-sale-vs-foreclosure calculator.
Standing Bid Capital is a direct, all-cash buyer of REO and CRE loans, $250K–$25M, nationwide. Request a confidential review.