Bulk REO Investment Tips
Posted by Knowledge Guy in Business and Commerce, tags: Barage, bulk reo, bulk reo investing, buyer mandate, Capital Partners, Commercial Financing, Conventional Sources, Dimes, Foreclosure Proceedings, Hard Money, Hedge Funds, Investment Tips, Opportunistic Real Estate, Pennies, Private Investment Funds, Private Investors, Property Lenders, Public Auction, Real Estate Broker, Real Estate Investors, reo packages, Reo Properties, seller mandate, Sources Of Funding, Wealthy InvestorsThe weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.
This new opportunity – known as ‘Bulk REO Investing’ – is so huge it’s captured attention from wealthy investors and private investment funds alike.
Consider with me, if you will, the fundamentals of the Bulk REO business.
To understand investing in Bulk REO, you have to understand the foreclosure process.
As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. The formal process of foreclosure begins at the lender’s discretion. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.
To complete the foreclosure process, the property is auction to the public. If the property is not purchased at auction, ownership reverts to the original lender. The designation of ‘REO’ (Real Estate Owned) is then attached to the foreclosed property.
Lenders usually try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. However, the purchase of a ‘package’ (or group) or REO properties is the trade-off for receiving such great prices.
These REO packages represent the potential to acquire huge amounts of equity for savvy real estate investors. REO packages are easiest to buy and sell with a well regarded source of financing in place. There are many sources of funding for these transasactions including: hard money and commercial financing, as well as non conventional sources such as hedge funds and private investors. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Salvatore Bushemi of Dandrew Capital Partners, a New-York based hedge fund.
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