With more foreclosures now than ever before, America’s weak real estate market seems to set new dismal records each month. But smart real estate investors are turning these ‘lemons’ into ‘lemonade’ in an incredibly profitable new way.
That opportunity is called Bulk REO Investing, and the opportunity is huge.
The basis of the Bulk REO business is foreclosures, so let’s analyze the foreclosure process now.
To understand Bulk REO investing is to understand the foreclosure process.
As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. The lender directs the subsequent timing of the actual foreclosure proceedings. 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 at the foreclosure auction, the lender regains title to the property. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ property.
Lenders usually try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. 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.
These REO packages represent the potential to acquire huge amounts of equity for savvy real estate investors. 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 Capital Partners, a hedge fund in New York.
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This post was written by admin on December 17, 2009
