Bulk REO Real Estate Investing

There are more foreclosures in the United States right now than we have ever experienced before. But smart real estate investors are turning these ‘lemons’ into ‘lemonade’ in an incredibly profitable new way.

 

This new opportunity – known as ‘Bulk REO Investing’ – is so huge it’s captured attention from wealthy investors and private investment funds alike.

 

The basis of the Bulk REO business is foreclosures, so let’s analyze the foreclosure process now.

 

To understand investing in Bulk REO, you have to understand the foreclosure process.

 

When a home owner begins to miss payments on their mortgage, the lender begins to send late/overdue notices to the home owner. After a certain period, the lender will then formally begin foreclosure proceedings. The name for this period is ‘preforeclosure’.

 

To complete the foreclosure process, the property is auction to the public. If there are no buyers at the foreclosure auction, the lender regains title to the property. The property then receives the designation of being an ‘REO’ or the more formal name, ‘Real Estate Owned’.

 

Lenders usually try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. The trade-off is that the buyer must purchase multiple REO properties in each transaction.

 

There is huge profit potential in these REO packages for qualified real estate investors. The most successful Bulk REO Investors will have a well-respected source of funding for their transactions. There are many sources of funding for these transasactions including: hard money and commercial financing, as well as non conventional sources such as hedge funds and private investors. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Salvatore Buscemi of Dandrew Capital Partners, a New-York based hedge fund.