How To Get Started With Bulk REO Investing

The recession in the U.S. economy has resulted in more foreclosures than experienced by any other generation of Americans. 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.

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.

Mortgage lenders faced with a non-paying home owner send a large volume of threats, warnings and documentation to the borrower who is late. The lender directs the subsequent timing of the actual foreclosure proceedings. The name for this period is ‘preforeclosure’.

Foreclosure is completed when the defaulted property is auctioned. Ownership of the property is returned to the lender if the property is not sold at auction. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ property.

Lenders have no interest in owning property, and thus usually opt to list their REO properties with a local real estate broker in hopes of a retail sale. 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.

The REO investment packages available today have provided a way to profitably capitalize on the U.S. recession. The most successful Bulk REO Investors will have a well-respected source of funding for their transactions. 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 Partners, a hedge fund in New York.