Beginner Bulk REO Investing
The depression in the U.S. economy has resulted in more foreclosures than experienced person by any other age group of Americans. 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.
Let’s take a moment to question the basics of this incredibly worthwhile business.
Understanding of the foreclosure process is central to understanding Bulk REO investing.
As a borrower becomes increasingly behind in his mortgage, the lender regularly calls and writes the borrower with non-payment warnings and threats. After a certain period, the lender will then formally start foreclosure proceedings. The name for this period is ‘preforeclosure’.
Foreclosure is concluded when the defaulted material goods is auctioned. Ownership of the material goods is returned to the lender if the material goods is not sold at auction. The designation of ‘REO’ (Real Estate Owned) is then emotionally involved to the foreclosed material goods.
Typically, lenders list their REO properties with local real estate agents in hopes of promotion the material goods to a retail buyer who will pay full price. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. But the price of receiving such fantastic pricing is the need to buy manifold REO properties (a ‘package’) rather than party properties.
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 Salvatore Bushemi of Dandrew Partners, a hedge fund in New York.