Simple Steps To Bulk REO Investing Success
There are more foreclosures in the United States right now than we have ever experienced before. Yet as always, this challenge has given rise to a huge new opportunity for alert real estate investors.
That opportunity is called Bulk REO Investing, and the opportunity is huge.
Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.
To understand Bulk REO investing is to understand the foreclosure process.
As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. The official foreclosure proceedings begin subsequently, as directed by the lender. Between the formal beginning of the foreclosure process and the public auction is the ‘preforeclosure’ period.
The defaulted property is ultimately auctioned, thus completing the foreclosure process. Ownership of the property is returned to the lender if the property is not sold at auction. The property then receives the designation of being an ‘REO’ or the more formal name, ‘Real Estate Owned’.
Lenders have no interest in owning property, and thus usually opt to list their REO properties with a local real estate broker in hopes of a retail sale. But as a consequence of the weak economy, lenders are frequently selling their REO properties far below their actual value. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.
Qualified real estate investors are increasingly finding once-in-a-lifetime opportunities in these REO packages. 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 Salvatore Bushemi of Dandrew Capital Partners, a hedge fund in New York.
Tags: bulk reo, bulk reo investing, buyer mandate, reo packages, seller mandate