No generation in American history has ever experienced the number of foreclosures and defaulted mortgages as is happening now. Yet well-funded investors in real estate are seizing upon this opening to profit from an profoundly profitable new opportunity.
The real estate investing strategy du jour is called ‘Bulk REO Investing‘ and is a real monster.
Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.
You can’t understand Bulk REO Investments without understanding the process of foreclosure.
As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. Following a period of time determined by the lender, formal foreclosure proceedings begin. Between the formal beginning of the foreclosure process and the public auction is the ‘preforeclosure’ period.
Foreclosure is completed when the property is put up for auction. 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. 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 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. 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 New-York based hedge fund.
