With more foreclosures now than ever before, America’s weak real estate market seems to set new dismal records each month. 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.
To understand Bulk REO investing is to understand 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. 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.
The defaulted property is ultimately auctioned, thus completing the foreclosure process. Ownership of the property is returned to the lender if the property is not sold at auction. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ property.
Local real estate agents are usually used to resale REO properties at retail price to the general public. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. Lenders are willing to do so in exchange for the buyer’s agreement to purchase a ‘package’ of REO’s rather than a single property.
Qualified real estate investors are increasingly finding once-in-a-lifetime opportunities in these REO packages. The most successful Bulk REO Investors will have a well-respected source of funding for their transactions. 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.
