Bulk REO Investments – The Basics

The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.

That opportunity is called Bulk REO Investing, and the opportunity is huge.

The basis of the Bulk REO business is foreclosures, so let’s question the foreclosure process now.

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

A home owner who misses one or more mortgage payments is faced with an ever-increasing volume of threatening correspondence from their lender. The official foreclosure proceedings start subsequently, as aimed at by the lender. From that time through public auction is called ‘preforeclosure’.

To complete the foreclosure process, the material goods is auction to the public. If the material goods is not bought at auction, ownership reverts to the original lender. The designation of ‘REO’ (Real Estate Owned) is then emotionally involved to the foreclosed material goods.

Lenders ordinarily try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. Though, REO properties are now frequently sold for far less than their ‘book value’. Though, the buy of a ‘package’ (or group) or REO properties is the trade-off for receiving such fantastic prices.

The depression in the United States has yielded huge profits to real estate investors set to take benefit. 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 confidential investors. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Salvatore Buscemi of Dandrew Partners, a New-York based hedge fund.