All About Bulk REO Investing

The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. But smart real estate investors are rotary these ‘lemons’ into ‘lemonade’ in an incredibly profitable new way.

The real estate investing strategy du jour is called ‘Bulk REO Investing‘ and is a real monster.

Let’s take a moment to question the basics of this incredibly worthwhile business.

Understanding the notion of Bulk REO’s requires understanding of the foreclosure process.

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 official foreclosure proceedings start subsequently, as aimed at by the lender. ‘Pre foreclosure’ is the name given to the time linking implementation of the foreclosure proceedings and the public auction.

Foreclosure is concluded when the material goods is place up for auction. If the material goods is not bought at auction, ownership reverts to the original lender. The material goods then receives the designation of being an ‘REO’ or the more formal name, ‘Real Estate Owned’.

Lenders ordinarily 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 promotion their REO properties far below their actual value. This happens because the buyer of the REO is vital to buy manifold REO’s in a single transaction.

The REO investment packages available today have provided a way to gainfully capitalize on the U.S. depression. REO packages are simplest to buy and sell with a well regarded source of financing in place. 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 confidential investors. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Sal Bushemi of Dandrew Partners, a New-York based hedge fund.