Fundamentals Of Bulk REO Investing

With more foreclosures now than ever before, America’s weak real estate market seems to set new dismal records each month. However, opportunistic real estate investment professionals are turning the recession into great profits with a bit of creativity.

That opportunity is called Bulk REO Investing, and the opportunity is huge.

Let’s take a moment to analyze the basics of this incredibly lucrative business.

You can’t understand Bulk REO Investments without understanding the process of foreclosure.

When a home owner begins to miss payments on their mortgage, the lender begins to send late/overdue notices to the home owner. The formal process of foreclosure begins at the lender’s discretion. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.

Foreclosure is completed when the property is put up for auction. The lender regains ownership of the property if there are no buyers at auction. Such a property is then classified as an ‘REO’ (Real Estate Owned) by the lender.

Local real estate agents are usually used to resale REO properties at retail price to the general public. However, lenders are increasingly willing to take much less than their REO asset is actually worth. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.

The recession in the United States has yielded huge profits to real estate investors prepared to take advantage. The most successful Bulk REO Investors will have a well-respected source of funding for their transactions. Some sources of funding for these transactions are: personal funds, hard money lenders, commercial lenders and non-conventional sources such as private investors and hedge funds. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Sal Buscemi of Dandrew Capital Partners, a New-York based hedge fund.