Editor’s note:  Due to popular demand, this article is now syndicated on hundreds of websites throughout the internet.  For more information, check out BulkREO.net

The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. Yet as always, this challenge has given rise to a huge new opportunity for alert real estate investors.

The real estate investing strategy du jour is called ‘Bulk REO Investing‘ and is a a real monster.

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

Understanding the notion of Bulk REO’s requires understanding of the foreclosure process.

As a borrower becomes increasingly behind in his mortgage, the lender regularly calls and writes the borrower with default warnings and threats. The lender directs the subsequent timing of the actual foreclosure proceedings. Between the formal beginning of the foreclosure process and the public auction is the ‘preforeclosure’ period.

To complete the foreclosure process, the property is auction to the public. If the property is not purchased at auction, ownership reverts to the original 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. But as a consequence of the weak economy, lenders are frequently selling their REO properties far below their actual value. But the price of receiving such great pricing is the need to purchase multiple REO properties (a ‘package’) rather than individual properties.

There is huge profit potential in these REO packages for qualified real estate investors. One of the best ways to take advantage of Bulk REO Investing opportunities is to partner with a well-regarded source of funding. 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. One excellent source of funding for Bulk REO Investment transactions can be found here: Bulk REO Investment Training.

Bryan Ellis is widely recognized as a expert in the fields of real estate investing and internet marketing, so it’s no wonder he’s regarded as a founding thinker of the new phenomenon of Virtual Real Estate Investing. I recently spoke with him about this topic:

Landlords, rehabbers and foreclosure investors, take notice – you may soon be focused on the new concepts of Virtual Real Estate Investing. Everything from using the internet as an avenue to make more money in real estate to online games such as SecondLife seem to be included in the popular definition of this term. And the pure financial potential is staggering.

In order to figure out the truth of the matter, I sought out Bryan Ellis whose experience in the fledgling industry is truly impressive.

“I began using the term ‘virtual real estate investing’ in the late 1990’s when I realized the clear similiarities in profit strategies, regardless of whether the real estate in question is ‘virtual’ or ‘physical’” said Ellis.

One example of the parallels between virtual and physical real estate Bryan Ellis cites is the similarity between the monetization of domain names versus physical property. He points out that control of a domain name or even a specific web page is much like controlling a real estate property: “those assets can be monetized in similar ways: By selling them for a profit, by leasing them, by offering advertising, etc. It’s not even necessary to own a website in order to profit from it.”

Bryan Ellis points to the example of websites like HubPages, Squidoo, Google Knol, etc. “Each of these services allows any person to write an article or create other type of content, and then allows the author to share in the revenue generated on that page. It’s almost as if you’re renting retail space in a highly desirable shopping district, only you get the benefit of a ‘great address’ in the form of a well-known domain host like Google.com but without paying a single penny in rental fees. It’s a win-win scenario.”

I must admit: Its easy to see the parallels. For example, if you’re the owner of a desirable property, its desirability is (in a business context) largely due to its being in a location that is of interest to others. Similarly, ownership of a desirable domain name is valuable for the same reasons. Regardless of the type of asset, you can sell or lease or use any number of strategies to turn the assets into cash.

In our next installment of this series on virtual real estate investing, Bryan Ellis will share the internet analogies to the physical concept of real estate development.

While the author specializes in Moses Lake Real Estate, the information presented here applies to all locations.

MAKING SMART PRICING DECISIONS

Proper pricing of your house is one of the most critical decisions you will make when selling your property.  Some sellers want to price their home based on the return they would like on their initial investment, while others base the price on what they need to buy their new home.  Location, condition, and accessibility are three other variables that affect the price of a property. 

It is crucial to price your home correctly from the beginning because it will not sell if it is overpriced.Don’t make the mistaken assumption that you can simply reduce the price later once you have already lost numerous possible buyers.  A motivated seller keeps the price attractively low.

Current conditions in your local real estate marketplace will greatly influence the amount buyers are willing to pay for their home.  A professional Realtor will be able to guide you through the pricing pitfalls with a written market analysis that includes the selling prices for similar homes in your area.

PREPARING YOUR HOUSE FOR THE WALK-THROUGH

The movers have just pulled away from your house, leaving it totally empty–except for years’ worth of grime and dust.  If you don’t have the time or energy to clean your house for the new owners, you should consider paying a professional to do the job.

Before going to the closing table, your buyers will have a last chance to go through the house to check the appliances, fixtures and mechanical systems.Their goal is to make certain the house’s overall condition is in keeping with the sales contract.Although they may really want the house, they may be “worried” about the sale.

It is the little things that can trigger last-minute cold feet, so your best insurance is to make sure that the house looks great, everything is working properly, and all the agreed-upon repairs have been made.  Taking special care in preparation for the walk-through will help to promote a more relaxed atmosphere for the closing.

PRESENTING YOUR HOME

Ideally, a Real Estate Agent likes the properties they sell to appear flawless.However, even the most conscientious housekeepers find it hard to maintain the house in prime showing condition during the whole time the hose is for sale.

Keeping beds perpetually made, dishes washed, bathrooms spotless and closets neatly organized is a lot of work.  Is it worth it?  Yes – if you want your house to sell in a reasonable amount of time and for the best price.Buyers often interpret normal clutter as a house that hasn’t been maintained.” They see bathtub rings and imagine “plumbing bills.”  They see lint under the refrigerator and grease on the electric range and imagine having to replace all of the appliances.

When people make their final selection, they may be going on emotion and adrenaline rather than imagination.  You can help your agent by minimizing the amount of imagination the buyer will need to fall in love with your home.

If you would like to talk further about buying or selling Real Estate in Moses Lake, Ephrata or Soap Lake Wasington, please contact Moses Lake Realtor LeRae Redal at Moses Lake Realty Group or visit MosesLakeRealtyGroup.com.