Fundamentals Of Bulk REO Investments
January 4, 2010 by admin
Filed under General Articles
The recession in the U.S. economy has resulted in more foreclosures than experienced by any other generation of Americans. But smart real estate investors are turning these ‘lemons’ into ‘lemonade’ in an incredibly profitable new way.
The real estate investing strategy du jour is called ‘Bulk REO Investing‘ and is a real monster.
The basis of the Bulk REO business is foreclosures, so let’s analyze the foreclosure process now.
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. The official foreclosure proceedings begin subsequently, as directed by the lender. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.
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.
Typically, lenders list their REO properties with local real estate agents in hopes of selling the property to a retail buyer who will pay full price. However, REO properties are now frequently sold for far less than their ‘book value’. However, the purchase of a ‘package’ (or group) or REO properties is the trade-off for receiving such great prices.
The recession in the United States has yielded huge profits to real estate investors prepared to take advantage. 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. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Sal Buscemi of Dandrew Capital Partners, a New-York based hedge fund.
Bulk REO Investing Profit Strategies
December 31, 2009 by admin
Filed under General Articles
The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. Yet as always, this challenge has given rise to a huge new opportunity for alert real estate investors.
The new opportunity is known as ‘Bulk REO Investing’ or ‘REO Package Investing’ and it’s a huge opportunity.
Consider with me, if you will, the fundamentals of the Bulk REO business.
You can’t understand Bulk REO Investments without understanding the process of foreclosure.
As a borrower becomes increasingly behind in his mortgage, the lender regularly calls and writes the borrower with default warnings and threats. The official foreclosure proceedings begin subsequently, as directed by the lender. 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 the property is not purchased at auction, ownership reverts to the original lender. The lender then categorizes the property as ‘Real Estate Owned’ – or ‘REO’ for short.
Typically, lenders list their REO properties with local real estate agents in hopes of selling the property to a retail buyer who will pay full price. However, lenders are increasingly willing to take much less than their REO asset is actually worth. Lenders are willing to do so in exchange for the buyer’s agreement to purchase a ‘package’ of REO’s rather than a single property.
The recession in the United States has yielded huge profits to real estate investors prepared to take advantage. 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 Partners, a hedge fund in New York.