Bulk REO Investment Profit Strategies
The recession in the U.S. economy has resulted in more foreclosures than experienced by any other generation of Americans. But smart real estate investors are turning these ‘lemons’ into ‘lemonade’ in an incredibly profitable new way.
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.
To know investing in Bulk REO, you have to know the foreclosure administer.
When a home owner starts to miss payments on their mortgage, the lender starts to send late/overdue notices to the home owner. The formal administer of foreclosure starts at the lender’s discretion. The name for this period is ‘preforeclosure’.
To perfect the foreclosure administer, the property is auction to the public. If there are no buyers for the property at auction, the property is returned to the lender. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ property.
Lenders usually try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. Though, lenders are increasingly willing to take much less than their REO asset is really worth. This happens because the buyer of the REO is required to buy multiple REO’s in a single transaction.
Qualified real estate investors are increasingly finding once-in-a-lifetime opportunities in these REO packages. REO packages are simplest to buy and sell with a well regarded fund of financing in place. 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 Sal Bushemi of Dandrew Partners, a New-York based hedge fund.
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