Bulk REO Investor’s Guide To Getting Started
There are more foreclosures in the United States right now than we have ever experienced before. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.
The new opportunity is known as ‘Bulk REO Investing’ or ‘REO Package Investing’ and it’s a huge opportunity.
The basis of the Bulk REO business is foreclosures, so let’s analyze the foreclosure process now.
Understanding the notion of Bulk REO’s requires understanding of 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. The official foreclosure proceedings begin subsequently, as directed by the lender. From that time through public auction is called ‘preforeclosure’.
When a defaulted property is placed up for auction, the foreclosure process is completed. The lender regains ownership of the property if there are no buyers at auction. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ property.
REO properties are usually listed for sale with local real estate agents. But as a consequence of the weak economy, lenders are frequently selling their REO properties far below their actual value. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.
These REO packages represent the potential to acquire huge amounts of equity for savvy real estate investors. 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. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Salvatore Buscemi of Dandrew Capital Partners, a New-York based hedge fund.
Tags: bulk reo, bulk reo investing, buyer mandate, reo packages, seller mandate
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