Guide To Bulk REO Investing

The recession in the U.S. economy has resulted in more foreclosures than experienced by any other generation of Americans. Yet well-funded investors in real estate are seizing upon this opening to profit from an profoundly profitable new opportunity.

The real estate investing strategy du jour is called ‘Bulk REO Investing‘ and is a real monster.

Consider with me, if you will, the fundamentals of the Bulk REO business.

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

As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. Following a period of time determined by the lender, formal foreclosure proceedings begin. Between the formal beginning of the foreclosure process and the public auction is the ‘preforeclosure’ period.

To complete the foreclosure process, the property is auction to the public. If there are no buyers at the foreclosure auction, the lender regains title to the property. Such a property is then classified as an ‘REO’ (Real Estate Owned) by the lender.

REO properties are usually listed for sale with local real estate agents. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. 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. 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 Buscemi of Dandrew Partners, a hedge fund in New York.