Bulk REO Real Estate Investing
There are more foreclosures in the United States right now than we have ever experienced before. Yet as always, this challenge has given rise to a huge new opportunity for alert real estate investors.
The real estate investing strategy du jour is called ‘Bulk REO Investing‘ and is a real monster.
Consider with me, if you will, the fundamentals of the Bulk REO business.
You can’t understand Bulk REO Investments without understanding the process of foreclosure.
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 ‘pre-foreclosure’ time starts with filing of foreclosure paperwork and concludes at public auction.
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. The designation of ‘REO’ (Real Estate Owned) is then attached to the foreclosed property.
Local real estate agents are usually used to resale REO properties at retail price to the general public. However, lenders are increasingly willing to take much less than their REO asset is actually worth. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.
Qualified real estate investors are increasingly finding once-in-a-lifetime opportunities in these REO packages. REO packages are easiest 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 Sal Bushemi of Dandrew Partners, a New-York based hedge fund.
Tags: bulk reo, bulk reo investing, buyer mandate, reo packages, seller mandate