No generation in American history has ever experienced the number of foreclosures and defaulted mortgages as is happening now. However, opportunistic real estate investment professionals are turning the recession into great profits with a bit of creativity.
This new opportunity - known as ‘Bulk REO Investing’ - is so huge it’s captured attention from wealthy investors and private investment funds alike.
Take a just a minute to consider the basics of this highly profitable business.
Understanding the notion of Bulk REO’s requires understanding of the foreclosure process.
When a home owner begins to miss payments on their mortgage, the lender begins to send late/overdue notices to the home owner. Following a period of time determined by the lender, formal foreclosure proceedings begin. The name for this period is ‘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. The designation of ‘REO’ (Real Estate Owned) is then attached to the foreclosed property.
Lenders usually try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. However, lenders are increasingly willing to take much less than their REO asset is actually worth. The trade-off is that the buyer must purchase multiple REO properties in each transaction.
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.

