The recession in the U.S. economy has resulted in more foreclosures than experienced by any other generation of Americans. Yet as always, this challenge has given rise to a huge new opportunity for alert real estate investors.
Bulk REO Investing is the name of the new strategy, and its captured the attention of many well-heeled investors.
Lets take some time to analyze the basics of this incredibly profitable business. Understanding the concept of Bulk REOs requires understanding of the foreclosure process. When a home owner begins to miss installments on their mortgage, the mortgage company begins to send late/overdue notices to the property owner. After a designated period, the lender will then formally begin foreclosure proceedings. Between the formal start of the foreclosure process and the public auction is the preforeclosure time period.
Foreclosure is completed when the defaulted property is auctioned. Ownership of the property is returned to the lender if the property is not sold at auction. The designation of REO (Real Estate Owned) is then attached to the foreclosed property.
Lenders, typically, market their REO properties with local real estate brokers in hopes of selling the house to a retail buyer who will pay full asking price. However, REO properties are now commonly sold for far less than their market value. However, the purchase of a package (or group) of REO properties is the compromise for receiving such great deals.
The recession in the United States has yielded huge profits to real estate investors prepared to take advantage. 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.