Bulk REO Investor Profit Strategies 101
There are more foreclosures in the United States right now than we have ever experienced before. But smart real estate investors are turning these ‘lemons’ into ‘lemonade’ in an incredibly profitable new way.
‘Bulk REO Investing’ is the name of the new strategy, and it’s captured the attention of many well-heeled investors.
Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.
You can’t understand Bulk REO Investments without understanding the process 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 lender directs the subsequent timing of the actual foreclosure proceedings. From that time through public auction is called ‘preforeclosure’.
Foreclosure is completed when the property is put up for auction. The lender regains ownership of the property if there are no buyers at auction. The designation of ‘REO’ (Real Estate Owned) is then attached to the foreclosed property.
Lenders usually try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.
The REO investment packages available today have provided a way to profitably capitalize on the U.S. recession. 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. 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 New-York based hedge fund.
