Online Calculator | Bulk REO Investing 101 For Beginners

Bulk REO Investing 101 For Beginners

The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. Yet well-funded investors in real estate are seizing upon this opening to profit from an profoundly profitable new opportunity.

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

Take a just a minute to consider the basics of this highly profitable business.

Understanding of the foreclosure process is central to understanding Bulk REO investing.

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’.

The defaulted property is ultimately auctioned, thus completing the foreclosure process. 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. Lenders are willing to do so in exchange for the buyer’s agreement to purchase a ‘package’ of REO’s rather than a single property.

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

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