Bulk REO Investment Profit Strategies

The recession in the U.S. economy has resulted in more foreclosures than experienced by any other generation of Americans. 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.

Consider with me, if you will, the fundamentals of the Bulk REO business.

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. After a certain period, the lender will then formally begin foreclosure proceedings. The ‘pre-foreclosure’ time starts with filing of foreclosure paperwork and concludes at public auction.

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. 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. Bulk REO Investors are most successful when they have a well-established source of funding for their REO packages. 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 Sal Buscemi of Dandrew Partners, a New-York based hedge fund.