Bulk REO Investing Profit Strategies – Getting Started

There are more foreclosures in the United States right now than we have ever experienced before. Yet well-funded investors in real estate are seizing upon this opening to profit from an profoundly profitable new opportunity.

‘Bulk REO Investing’ is the name of the new strategy, and it’s captured the attention of many well-heeled investors.

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

To understand investing in Bulk REO, you have to understand the foreclosure process.

As a borrower becomes increasingly behind in his mortgage, the lender regularly calls and writes the borrower with default warnings and threats. The lender directs the subsequent timing of the actual foreclosure proceedings. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.

Foreclosure is completed when the property is put up for auction. If there are no buyers at the foreclosure auction, the lender regains title to the property. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ 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. However, REO properties are now frequently sold for far less than their ‘book 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 Bushemi of Dandrew Partners, a New-York based hedge fund.