Bulk REO Investor’s Guide To Getting Started

The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. But smart real estate investors are turning these ‘lemons’ into ‘lemonade’ in an incredibly profitable new way.

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.

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.

The defaulted property is ultimately auctioned, thus completing the foreclosure process. 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.

Lenders usually try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. 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.

The REO investment packages available today have provided a way to profitably capitalize on the U.S. recession. 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 Buscemi of Dandrew Capital Partners, a New-York based hedge fund.