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Bulk REO Investing - The Basics

Bulk REO Investing - The Basics


Bulk REO Investing - The Basics

by Jerome Pennix

The U.S. economy recession has resulted in the most foreclosures than ever experienced by any other generation of Americans. Yet as to be expected, this challenge has given rise to a great unexpected opportunity for savvy real estate investors.

Bulk REO Investing is the name of the new strategy, and its captured the attention of many well-heeled investors.

Why don't we take a moment to understand the basics of this incredibly lucrative opportunity. Understanding the idea of Bulk REOs requires comprehension of the foreclosure process. When a property owner begins to miss payments on their loan, the lender begins to send late/overdue letters to the home owner. After a certain period, the mortgage company will then officially begin foreclosure proceedings. Between the formal beginning of the foreclosure proceedings and the public auction is the preforeclosure time.

Foreclosure is finalized when the defaulted house is auctioned. Ownership of the property is returned to the bank if the property is not sold at auction. The designation of REO (Real Estate Owned) is then attached to the foreclosed house.

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 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.

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