Editor’s note: Due to popular demand, this article is now syndicated on hundreds of websites throughout the internet. For more information, check out BulkREO.net
There are more foreclosures in the United States right now than we have ever experienced before. 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 a real monster.
Consider with me, if you will, the fundamentals of the Bulk REO business.
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 formal process of foreclosure begins at the lender’s discretion. Between the formal beginning of the foreclosure process and the public auction is the ‘preforeclosure’ period.
Foreclosure is completed when the defaulted property is auctioned. If there are no buyers at the foreclosure auction, the lender regains title to the property. Such a property is then classified as an ‘REO’ (Real Estate Owned) by the lender.
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. However, the purchase of a ‘package’ (or group) or REO properties is the trade-off for receiving such great prices.
The recession in the United States has yielded huge profits to real estate investors prepared to take advantage. REO packages are easiest to buy and sell with a well regarded source of financing in place. 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. One excellent source of funding for Bulk REO Investment transactions can be found here: Bulk REO Investment Training.
