Bulk REO Investment Profit Strategies 101

No generation in American history has ever experienced the number of foreclosures and defaulted mortgages as is happening now. However, opportunistic real estate investment professionals are turning the recession into great profits with a bit of creativity.

This new opportunity – known as ‘Bulk REO Investing’ – is so huge it’s captured attention from wealthy investors and private investment funds alike.

Take a just a minute to consider the basics of this highly profitable business.

To understand Bulk REO investing is to understand the foreclosure process.

As a borrower becomes increasingly behind in his mortgage, the lender regularly calls and writes the borrower with default warnings and threats. After a certain period, the lender will then formally begin foreclosure proceedings. From that time through public auction is called ‘preforeclosure’.

To complete the foreclosure process, the property is auction to the public. 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’.

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. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.

The REO investment packages available today have provided a way to profitably capitalize on the U.S. recession. Bulk REO Investors are most successful when they have a well-established source of funding for their REO packages. 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 Buscemi of Dandrew Capital Partners, a New-York based hedge fund.