What is an SREO and Why is it Important?


A schedule of real estate owned (SREO) is a clear and precise document that tables all necessary information concerning real estate property owned, the current value of the properties, and debt owed on the property.

An SREO is a crucial document for anyone looking to start investing in real estate. Any commercial lender will require an SREO as it provides a neat and detailed list useful in determining risks and profits. 

If you are interested in drafting your first SREO, are working on perfecting your current SREO, or simply want more information on an SREO then this article may be a valuable tool.

What Does SREO Stand for and What is it?

SREO stands for a schedule of real estate owned. While it isn’t a conventional schedule in terms of time and plan, it does present a clear schedule regarding information related to all real estate owned by an investor.

This document lists out all of the property that an investor has full or partial ownership of. It also includes the current market values of said property and any debt obligations connected to these properties.

It can also be referred to as real estate owned (REO). An SREO is only required with commercial real estate and is a critical document when completing a commercial real estate loan application for a new property.

Schedule of Real Estate Owned (SREO) vs Personal Financial Statement (PFS)?

Most lenders will require a copy of both a Personal Financial Statement (PFS) and an SREO when applicable. A PFS is a summary of a borrower’s financial assets and liabilities. This shows a clear picture of the borrower’s net worth, reliability, and financial goals for the lender to investigate.

The SREO shows a comprehensive list of a borrower’s current real estate holdings, along with value and debt. An SREO is only used when applying for a real estate property, whereas a PFS is used when applying for any sort of loan.

Both SREO and PFS are valuable tools when looking into investments, however, the precise use may vary. While you will always need a PFS when seeking a loan, an SREO is not always required. Here are the key differences to keep in mind when working on your SREO and PFS.

Schedule of Real Estate Owned (SREO) Personal Financial Statement (PFS)
  • Document of a borrower’s current real estate holdings, the value of those holdings, and total related debt. 
  • Shows a glimpse into current real estate holdings. 
  • Used by real estate investors when applying for a loan to purchase commercial real estate.
  • Document of a borrower’s financial assets and liabilities.
  • Shows a glimpse into the borrower’s total net worth.
  • Used for any type of loan.


What Needs to be Included in an SREO?

An SREO is a breakdown of all real estate property owned and relevant information associated with the property. There are five main components to the typical SREO:

  1. Personal Details. The section includes all personal details. You should include the investor’s name, address, and contact information (phone and email).

  2. Property Details. This section should include all properties that an investor has a stake in, whether it’s full or partial ownership. Each property should be listed with its address, property type, number of units, and acquisition date.

  3. Ownership Details. This section shares information about the entity that owns the property and the investor’s individual stake in each property.

  4. Financial Details. This section includes the property’s market value, the loan amount, the loan’s origination date, the balance and interest rate of the loan, the monthly payment amount, and the loan’s maturity date. The property’s market value can be based on the most recent appraisal of the property, with the date of appraisal included as well.

  5. Revenue or Pro Forma. This section provides information that supports the estimate of the revenue of the property. For fix-and-flip properties, the investor should include the projected sale date of the property. For buy-and-hold properties, the investor should include the occupancy rate and current net operating income (NOI) of the property.The exact formatting and minor details provided may differ between investors, but the formatting above paints a clear picture of the essential information that is generally required. Some lenders use a premade template for their SREO, while others will ask you to turn over your own.

Who Uses an SREO and Why is it Important to them?

An SREO is utilized by many entities in the real estate business because it depicts the borrower’s financial success and risk.

  1. Lenders. An SREO provides the potential lender with essential information that cannot be found on a credit report. It shows the borrower’s financial liabilities and potential revenue to pay back a loan.

  2. Real Estate Brokers. Investor-friendly real estate brokers may be more than willing to work with an investor when they have a clear picture of the investor’s reliability and ability to afford a specific property.

  3. Investment Partners. A detailed and well-written SREO can serve as a beneficial tool for potential partners as it can professionally express reliability and profit-making to one another. In addition, having a well-prepared SREO can show experience using  LLCs for real estate investing.
  4. Underwriters. Underwriters use an SREO to help calculate the debt-to-income ratio of the borrower. An underwriter’s sole job is to calculate and analyze a potential borrower’s risk.Preparing your SREO in advance can better help prepare you for any commercial investment you make. In addition, it is beneficial to keep your SREO up-to-date on current information to save yourself time.

Preparing your SREO to Simplify and Speed Up the Underwriting Process

The underwriting process can be time-consuming. Preparing your SREO in advance will speed up the underwriting process and make your get your loan closed that much faster. Let’s review some things to keep in mind while preparing your SREO in anticipation of the underwriting process.

  1. Clear and Concise. This makes it easy and appealing for the underwriter to access the necessary information they are looking for.

  2. Consistent Information. All relevant information should remain consistent throughout the SREO and should match with other financial records. Underwriters will catch inconsistencies and this will prove to be an unnecessary bump in the road. 
  3. Communication. If you have any questions or if anything is unclear throughout the process, be sure to ask your lender or broker. It is beneficial to clear up all misunderstandings as early as possible.Following these basic steps can help ensure a speedy, and smooth, underwriting process. Investing in new commercial property can be time-consuming as is, an investor should strive for simplicity whenever they can.

Suggested Template for SREO

The suggested template for an SREO may differ between financial institutions. Most government lending programs, such as Fannie Mae, provide a pre-determined form that follows strict guidelines. Other institutions might present rough guidelines for what they are looking for, and another firm might ask you to present your own.

If you are using your own SREO, the formatting does not matter as much as the clarity and readability of the contents.

Who Signs an SREO?

The person who signs and dates an SREO is the person who owns the property listed in that specific SREO. An SREO functions as a data-set of that person’s financial information and current position. The person who signs is guaranteeing that all information is accurate and up-to-date at the time of signing.

Should Investors Include Properties They Have Sold in the SREO?

Generally, sold properties are not included on an SREO. Although, they may be included in a separate, attached document.

Including documentation on sold properties will create a full picture of past properties and revenue earned. This information may be beneficial for the underwriting process and provide additional security to the potential lender.

Are You Ready to Prepare Your Schedule of Real Estate Owned (SREO)?

An SREO serves as an illustration of a potential borrower’s current financial situation and is absolutely crucial in real estate investing. While it may seem like a big task initially, keeping your SREO up-to-date will prove beneficial. Maintaining your SREO to reflect all updated information will make the process much easier in the long-run, for both you and the financial institution you plan to work with.

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