Bulk REO Investment Tips
Written by ama on Monday, June 29th, 2009 in Uncategorized.
Bulk REO Investing Training Video
The Rise Of The Bulk REO Investing Industry
The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. However, opportunistic real estate investment professionals are turning the recession into great profits with a bit of creativity.
That opportunity is called Bulk REO Investing, and the potential is huge. Consider with me, if you will, the fundamentals of the Bulk REO business.
Mortgage lenders faced with a non-paying home owner send a large volume of threats, warnings and documentation to the borrower who is late. The lender directs the subsequent timing of the actual foreclosure proceedings. The ‘pre-foreclosure’ time starts with filing of foreclosure paperwork and concludes at public auction.
Foreclosure is completed when the defaulted property is auctioned. The lender regains ownership of the property if there are no buyers at auction. Such a property is then classified as an ‘REO’ (Real Estate Owned) by the lender.
REO properties are usually listed for sale with local real estate agents. But as a consequence of the weak economy, lenders are frequently selling their REO properties far below their actual value. The trade-off is that the buyer must purchase multiple REO properties in each transaction.
Qualified real estate investors are increasingly finding once-in-a-lifetime opportunities in these REO packages. Bulk REO Investors are most successful when they have a well-established source of funding for their REO packages. 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.
Note - One of the nation’s leading experts on bulk reo investing is hedge fund manager Sal Buscemi. Salvatore Buscemi recognized the irrationality of the real estate boom of the late 1990’s and early 2000’s and capitalized on this by forming his very well-regarded hedge fund, Dandrew Capital Partners.