Bulk REO Investing Guide to Getting Started
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.
This new opportunity – known as ‘Bulk REO Investing’ – is so huge it’s captured attention from wealthy investors and private investment funds alike.
Consider with me, if you will, the fundamentals of the Bulk REO business.
To know Bulk REO investing is to know the foreclosure administer.
A home owner who misses one or more mortgage payments is faced with an ever-increasing volume of threatening correspondence from their lender. The formal administer of foreclosure starts at the lender’s discretion. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.
When a defaulted property is placed up for auction, the foreclosure administer is completed. 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. The trade-off is that the buyer must buy multiple REO properties in each transaction.
There is huge profit potential in these REO packages for qualified real estate investors. REO packages are simplest to buy and sell with a well regarded fund of financing in place. 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 Sal Buscemi of Dandrew Partners, a hedge fund in New York.
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