OAKLAND, Calif.—On a recent weekday morning, a crew was busy sprucing up the exterior of Koonal Parmar's one-story house in West Oakland. They trimmed trees, pressure-washed the wood siding and touched up his paint job.

Mr. Parmar didn't pay a dime for all this. The upgrades were compliments of REO Homes LLC, an investment firm that owns several houses on Mr. Parmar's block. In addition to helping homeowners upgrade their homes, REO has mended fences and planted hundreds of trees along city streets.

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