All About Being A Bulk REO Investor

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

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

The basis of the Bulk REO business is foreclosures, so let’s analyze the foreclosure process now.

You can’t understand Bulk REO Investments without understanding the process of foreclosure.

As a borrower becomes increasingly behind in his mortgage, the lender regularly calls and writes the borrower with default warnings and threats. The official foreclosure proceedings begin subsequently, as directed by the lender. The name for this period is ‘preforeclosure’.

Foreclosure is completed when the property is put up for auction. The lender regains ownership of the property if there are no buyers at auction. The designation of ‘REO’ (Real Estate Owned) is then attached 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. But more and more, lenders are selling their REO properties for a greatly reduced price. However, the purchase of a ‘package’ (or group) or REO properties is the trade-off for receiving such great prices.

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 Buscemi of Dandrew Capital Partners, a New-York based hedge fund.