Bulk REO Investment Profit Strategies
There are more foreclosures in the United States right now than we have ever experienced before. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.
The new opportunity is known as ‘Bulk REO Investing’ or ‘REO Package Investing’ and it’s a huge opportunity.
The basis of the Bulk REO business is foreclosures, so let’s analyze the foreclosure administer now.
You can’t know Bulk REO Investments without understanding the administer of foreclosure.
As a borrower becomes increasingly behind in his mortgage, the lender regularly calls and writes the borrower with default warnings and threats. The formal administer of foreclosure starts at the lender’s discretion. Between the formal beginning of the foreclosure administer and the public auction is the ‘preforeclosure’ period.
Foreclosure is completed when the defaulted property is auctioned. If there are no buyers for the property at auction, the property is returned to the lender. The lender then categorizes the property as ‘Real Estate Owned’ – or ‘REO’ for small.
REO properties are usually programmed for sale with community real estate agents. But more and more, lenders are selling their REO properties for a greatly reduced price. Lenders are willing to do so in chat for the buyer’s agreement to buy a ‘package’ of REO’s very than a single property.
Qualified real estate investors are increasingly finding once-in-a-lifetime opportunities in these REO packages. Bulk REO Investors are most successful when they have a well-established fund of funding for their REO packages. Some sources of funding for these transactions are: private 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 Salvatore Bushemi of Dandrew Partners, a hedge fund in New York.
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