bulk reo
The Fundamentals Of Investment In Bulk REO
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.
‘Bulk REO Investing’ is the name of the new strategy, and it’s captured the attention of many well-heeled investors.
Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.
Understanding of the foreclosure process is central to understanding Bulk REO investing.
When a home owner begins to miss payments on their mortgage, the lender begins to send late/overdue notices to the home owner. The lender directs the subsequent timing of the actual foreclosure proceedings. The ‘pre-foreclosure’ time starts with filing of foreclosure paperwork and concludes at public auction.
The defaulted property is ultimately auctioned, thus completing the foreclosure process. If there are no buyers for the property at auction, the property is returned to the lender. The property then receives the designation of being an ‘REO’ or the more formal name, ‘Real Estate Owned’.
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. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. The trade-off is that the buyer must purchase multiple REO properties in each transaction.
There is huge profit potential in these REO packages for qualified real estate investors. One of the best ways to take advantage of Bulk REO Investing opportunities is to partner with a well-regarded source of funding. 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 Capital Partners, a New-York based hedge fund.
Getting Started With Bulk REO Investing
No generation in American history has ever experienced the number of foreclosures and defaulted mortgages as is happening now. 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.
The basis of the Bulk REO business is foreclosures, so let’s analyze the foreclosure process now.
Understanding the notion of Bulk REO’s requires understanding of 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. From that time through public auction is called ‘preforeclosure’.
Foreclosure is completed when the defaulted property is auctioned. The lender regains ownership of the property if there are no buyers at auction. Such a property is then classified as an ‘REO’ (Real Estate Owned) by the lender.
Local real estate agents are usually used to resale REO properties at retail price to the general public. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. 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. Bulk REO Investors are most successful when they have a well-established source of funding for their REO packages. 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.