The recession in the U.S. economy has caused more foreclosures than experienced by any other generation of Americans. However, as always, this challenge has given way to a large new opportunity for informed 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 a moment to analyze the basics of this incredibly lucrative business. Understanding the notion of Bulk REOs requires understanding of the foreclosure process. When a home owner begins to miss payments on their mortgage, the lender begins to send late/overdue notices to the home owner. After a certain period, the lender will then formally begin foreclosure proceedings. Between the formal beginning of the foreclosure process and the public auction is the preforeclosure 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.
Typically, mortgage companies list their REO properties with local real estate agents in desire of selling the property to a retail buyer who will spend full price. However, REO properties are now frequently sold for far below their book value. However, the acquisition of a package (or group) of REO houses is the trade-off for getting such great prices.
The recession in the U.S. has yielded great profits to real estate investors ready to take advantage. One of the best ways to take advantage of Bulk REO Investing opportunities is to connect with a well-regarded source of finances. Some sources of financing for these transactions are: personal funds, hard money lenders, commercial lenders and non-conventional sources such as private investors and hedge funds.