Bulk REO Investment Profit Strategies

There are more foreclosures in the United States right now than we have ever experienced before. However, opportunistic real estate investment professionals are turning the recession into great profits with a bit of creativity.

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 home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. The official foreclosure proceedings begin subsequently, as directed by the lender. The name for this period is ‘preforeclosure’.

Foreclosure is completed when the defaulted property is auctioned. If the property is not purchased at auction, ownership reverts to the original lender. The lender then categorizes the property as ‘Real Estate Owned’ – or ‘REO’ for short.

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 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. 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. One excellent source of funding for Bulk REO Investment transactions can be found here: Bulk REO Investment Training.