With that being said, there is financing that will allow you to repair the home, so work with an experienced buyers agent and your lender to make sure you find out before the offer and not after you paid for the appraisal that the home qualifies or not.
If buying cash, have fun you only restrict yourself.
REO inventory is still high. Make sure you work with a good buyer's agent. REO sales are a bit different from regular sales. The main concern will be the condition the property. In a REO since the seller (the Bank) has never lived in the property and will not be able to provide you a clear history on the home, you are buying the home "as is". If you have an FHA loan some REO properties may not meet the conditions for FHA financing.
REO transactions require a diligent agent. Attention to detail is king. As a REO buyer you want an agent who is not too busy to dedicate the amount of time and personal attention you will need.
I am happy to say I have placed several buyers in REO properties, and would be more than happy to assist you.
Best of luck to you!!
Kawain Payne, Realtor
Prudential California Realty