Fundamentals Of Bulk REO Investing

The recession in the U.S. nation has resulted in more foreclosures than experienced by any other generation of Americans. But challenge always gives rise to chance, and opportunistic real estate investors are rising to the challenge.

This new chance – known as ‘Bulk REO Investing’ – is so huge it’s captured concentration from wealthy investors and private investment funds alike.

Consider with me, if you will, the fundamentals of the Bulk REO business.

To be with you investing in Bulk REO, you have to be with you 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. Following a period of time determined by the lender, formal foreclosure proceedings start. The name for this period is ‘preforeclosure’.

The defaulted property is ultimately auctioned, thus carrying out the foreclosure process. 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 emotionally involved to the foreclosed property.

Typically, lenders list their REO properties with local real estate agents in hopes of selling the property to a retail buyer who will pay full price. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. But, the buy of a ‘package’ (or group) or REO properties is the trade-off for being paid such fantastic prices.

The REO investment packages available today have provided a way to profitably make the most of on the U.S. recession. REO packages are simplest to buy and sell with a well regarded source of financing in place. 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 private investors. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Salvatore Bushemi of Dandrew Capital Partners, a New-York based hedge fund.