Posts Tagged ‘foreclosure investing’

Basics in Bulk REO Investing

October 23rd, 2009 by Adam | No Comments | Filed in Credit Score, Credit Score Advice, Credit Score Tips, Personal Finance

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There are more foreclosures in the United States right now than we have ever experienced before. Yet as always, this challenge has given rise to a huge new opportunity for alert real estate investors.

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

Let’s take a moment to analyze the basics of this incredibly lucrative business.

To understand investing in Bulk REO, you have to understand the foreclosure process.

Mortgage lenders faced with a non-paying home owner send a large volume of threats, warnings and documentation to the borrower who is late. 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 property is put up for auction. Ownership of the property is returned to the lender if the property is not sold at auction. Such a property is then classified as an ‘REO’ (Real Estate Owned) by the lender.

REO properties are usually listed for sale with local real estate agents. 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. The most successful Bulk REO Investors will have a well-respected source of funding for their transactions. 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 hedge fund in New York.

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Guide To Bulk REO Investing

September 22nd, 2009 by Adam | No Comments | Filed in Credit Score, Credit Score Advice, Credit Score Tips, Personal Finance

With more foreclosures now than ever before, America’s weak real estate market seems to set new dismal records each month. Yet as always, this challenge has given rise to a huge new opportunity for alert real estate investors.

That opportunity is called Bulk REO Investing, and the opportunity is huge.

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.

Mortgage lenders faced with a non-paying home owner send a large volume of threats, warnings and documentation to the borrower who is late. 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.

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. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ property.

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. But as a consequence of the weak economy, lenders are frequently selling their REO properties far below their actual value. However, the purchase of a ‘package’ (or group) or REO properties is the trade-off for receiving such great prices.

There is huge profit potential in these REO packages for qualified real estate investors. 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 Bushemi of Dandrew Partners, a hedge fund in New York.

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Bulk REO Investment Tips

August 12th, 2009 by Adam | No Comments | Filed in Credit Score, Credit Score Advice, Credit Score Tips, Personal Finance

Bulk REO

Editor’s note:  Due to popular demand, this article is now syndicated on hundreds of websites throughout the internet.  For more information, check out BulkREO.net

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.

Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.

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

When a home owner begins to miss payments on their mortgage, the lender begins to send late/overdue notices to the home owner. Following a period of time determined by the lender, formal foreclosure proceedings begin. ‘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.

Local real estate agents are usually used to resale REO properties at retail price to the general public. However, REO properties are now frequently sold for far less than their ‘book value’. 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.

There is huge profit potential in these REO packages for qualified real estate investors. Bulk REO Investors are most successful when they have a well-established source of funding for their REO packages. 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. One excellent source of funding for Bulk REO Investment transactions can be found here: Bulk REO Investment Training.

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The Explanation as to Why Banks Allow the Sale of Non-Performing Mortgage Notes and Bulk REO Property

May 11th, 2009 by Adam | No Comments | Filed in Credit Score, Credit Score Advice, Credit Score Tips

Bulk REO Video Training

Defaulted mortgages create a backlash whose effects are felt by not only the lenders, but the economy as a whole suffers as well.  A bank’s ability to borrow is negatively effected by around 900% when a mortgage defaults.  Let’s say the defaulted amount of the asset is just %100,000 - in that case the bank is blocked from borrowing up to $900,000 until the property is assumed by someone else.  As a property loses its value, the only option banks have is to record the adjusted value and take the financial hit.

(A quick note from the editor:  For related information, check out Bulk REO Investing.)

There are few solutions available to lenders that relieve the brunt non-performing assets put on their registers.  Foreclosure is almost always the last action banks take.  High legal expenses are the beginning of this costly process that lenders face.  REO (Real Estate Owned) properties also incur pervasive property management headaches until they are unloaded.  There is the concern that damage to REO properties, while they sit vacant, increases and further hurts the chances of any real profits.  When selling any property there are expenses - from marketing to transactions that accompany selling real estate.

Furthermore, lenders mus face the problem of staffing.  Still, if a mortgage lender thinks foreclosure is teh only reasonable option, it is faced with the daunting task of finding enough staff to oversee and unload REO’s, especially bulk REO’s.  Since about 1994 there hasn’t been this kind of lending crisis in which REO experts have been axed at jaw dropping proportions.  On top of this, the United States has few in-house experts at any of the larger lending institutions who can handle bulk REO’s which need someone to manage them, secure them and sell them with minimal loss.

Without a doubt, today’s servicing agencies and mortgage companies seem to singlemindedly be in agreement to unload troubled loans as quickly as possible even if it means selling at a loss.

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