Basics of Bulk REO Investing

There are more foreclosures in the United States right now than we have ever experienced before. But smart real estate investors are rotary these ‘lemons’ into ‘lemonade’ in an incredibly profitable new way.

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

Take a just a minute to consider the basics of this highly profitable business.

To be with you Bulk REO investing is to be with you the foreclosure process.

When a home owner starts to miss payments on their mortgage, the lender starts to send late/overdue notices to the home owner. The formal process of foreclosure starts at the lender’s discretion. The name for this period is ‘preforeclosure’.

The defaulted property is ultimately auctioned, thus carrying out the foreclosure process. Ownership of the property is returned to the lender if the property is not sold at auction. The property then receives the designation of being an ‘REO’ or the more formal name, ‘Real Estate Owned’.

REO properties are usually listed for sale with local real estate agents. But as a consequence of the weak nation, lenders are often selling their REO properties far below their actual value. The trade-off is that the buyer must buy multiple REO properties in each transaction.

The recession in the United States has yielded huge profits to real estate investors set to take advantage. The most thriving Bulk REO Investors will have a well-respected source of funding for their transactions. Some sources of funding for these transactions are: private funds, hard money lenders, commercial lenders and non-conventional sources such as private investors and hedge funds. 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.