Bulk REO Investment Profit Strategies 101
No generation in American history has ever experienced the number of foreclosures and defaulted mortgages as is happening now. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.
The real estate investing strategy du jour is called ‘Bulk REO Investing‘ and is a real monster.
Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.
Understanding of the foreclosure process is central to understanding Bulk REO investing.
When a home owner begins to miss payments on their mortgage, the lender begins to send late/overdue notices to the home owner. The lender directs the subsequent timing of the actual foreclosure proceedings. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the 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. 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. However, lenders are increasingly willing to take much less than their REO asset is actually worth. But the price of receiving such great pricing is the need to purchase multiple REO properties (a ‘package’) rather than individual properties.
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. 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 Buscemi of Dandrew Capital Partners, a hedge fund in New York.
