The recession in the U.S. economy has resulted in more foreclosures than experienced by any other generation of Americans. Yet well-funded investors in real estate are seizing upon this opening to profit from an profoundly profitable new opportunity.
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.
You can’t understand Bulk REO Investments without understanding the process of foreclosure.
A home owner who misses one or more mortgage payments is faced with an ever-increasing volume of threatening correspondence from their lender. Following a period of time determined by the lender, formal foreclosure proceedings begin. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.
The defaulted property is ultimately auctioned, thus completing the foreclosure process. If there are no buyers at the foreclosure auction, the lender regains title to the property. The property then receives the designation of being an ‘REO’ or the more formal name, ‘Real Estate Owned’.
REO properties are usually listed for sale with local real estate agents. But more and more, lenders are selling their REO properties for a greatly reduced price. But the price of receiving such great pricing is the need to purchase multiple REO properties (a ‘package’) rather than individual properties.
The REO investment packages available today have provided a way to profitably capitalize on the U.S. recession. REO packages are easiest to buy and sell with a well regarded source of financing in place. 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 hedge fund in New York.