The Fundamentals Of Investment In Bulk REO
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The Rise Of The Bulk REO Investing Business
With more foreclosures now than ever before, America’s weak real estate market seems to set new dismal records each month. 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 potential is huge. Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.
When a home owner starts to miss payments on their mortgage, the lender starts to send late/overdue notices to the home owner. Following a period of time determined by the lender, formal foreclosure proceedings start. 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. If there are no buyers at the foreclosure auction, the lender regains title to the property. The designation of ‘REO’ (Real Estate Owned) is then attached to the foreclosed property.
Lenders have no interest in owning property, and thus usually opt to list their REO properties with a local real estate broker in hopes of a retail sale. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. But the price of receiving such fantastic pricing is the need to buy multiple REO properties (a ‘package’) rather than individual properties.
These REO packages represent the potential to buy huge amounts of equity for savvy real estate investors. 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.
Note - One of the nation’s leading experts on bulk reo investing is hedge fund manager Salvatore Buscemi. Sal Buscemi recognized the irrationality of the real estate boom of the late 1990’s and early 2000’s and capitalized on this by forming his very well-regarded hedge fund, Dandrew Capital Partners.
Tags: bryan ellis, bulk reo, bulk reo investing, dandrew capital, dandrew capital partners, real estate investing, real estate investments, sal buscemi
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