The Basics Of Bulk REO Investment

The 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.

'Bulk REO Investing' is the name of the new strategy, and it's captured the attention of many well-heeled investors.

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

You can't understand Bulk REO Investments without understanding the process of foreclosure.

A home owner who misses one or more mortgage payments is faced with an ever-increasing volume of threatening correspondence from their lender. The formal process of foreclosure begins at the lender's discretion. From that time through public auction is called 'preforeclosure'.

When a defaulted property is placed up for auction, the foreclosure process is completed. If there are no buyers at the foreclosure auction, the lender regains title to the property. The lender then categorizes the property as 'Real Estate Owned' - or 'REO' for short.

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. 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 REO investment packages available today have provided a way to profitably capitalize on the U.S. recession. 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. One excellent source of funding for Bulk REO Investment transactions can be found here: Bulk REO Investment Training.