How To Become A Bulk REO Investor
With more foreclosures now than ever before, America’s weak real estate market seems to set new dismal records each month. However, opportunistic real estate investment professionals are turning the recession into great profits with a bit of creativity.
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 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. Following a period of time determined by the lender, formal foreclosure proceedings begin. From that time through public auction is called ‘preforeclosure’.
When a defaulted property is placed up for auction, the foreclosure process is completed. 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.
Local real estate agents are usually used to resale REO properties at retail price to the general public. But more and more, lenders are selling their REO properties for a greatly reduced price. Lenders are willing to do so in exchange for the buyer’s agreement to purchase a ‘package’ of REO’s rather than a single property.
The REO investment packages available today have provided a way to profitably capitalize on the U.S. recession. The most successful Bulk REO Investors will have a well-respected source of funding for their transactions. 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 Salvatore Bushemi of Dandrew Capital Partners, a New-York based hedge fund.
