Bulk Reo Investing The Easy Way
The waves of foreclosures sweeping across the nation have been nothing short of catastrophic
for many homeowners, but the current turmoil in the world economy has at the same time opened up many new opportunities for savvy real estate investors to build wealth. Since there are simply so many properties on the market right now and prices are so low; especially for foreclosed properties, there may never have been a better time than this very moment for getting into property investment. Similarly, there may never have been a better time to make a killing in this market.
One of the new opportunities that has been made available for investors looking to make the best of a bad situation is the exciting possibility of investing in REO properties and especially bulk REO properties. There are many investors who are making substantial profits with these investments as well as forward-looking investors who are purchasing these bulk properties and holding on to them or improving these properties, waiting for the market to strengthen before selling for an incredible profit.
If you'd like to learn more about how real estate investors are making lemonade out of the lemons of the foreclosure crisis and currently weak US real estate market, you've come to the right place. Keep reading for a look at what bulk REO investing is and how it is done - and for that matter, what REO property is in the first place.
As you've probably figured out by now, REO investing has to do with foreclosed property; but what is the relationship between foreclosure and REO property?
Since the foreclosure process itself is something that you are already somewhat familiar with, we can probably safely skip over this part. As you know, foreclosed properties are generally sold at a public auction if the homeowner is unable to become current with their payments before the grace period provided for in their state has run out.
Most of the time, these properties find a willing buyer at this auction; or more to the point, this used to be the case. The huge number of foreclosures currently going up for auction has meant that a lot of these foreclosed properties end up going through the auction without being sold. So what happens then?
Properties which don't find a buyer during the public auction are then the property of the bank or other lender who hold the mortgage for the property. This property is referred to by lenders as Real Estate Owned, or REO for short. This creates something of a problem for the lender; by and large, financial institutions are in the financial services business, not the real estate business. As far as a bank is concerned, a piece of real estate is an underperforming asset at best and evidence of a poor investment at worst. This means that these institutions are generally very eager to be rid of these properties.
What these lenders usually do is to contact a real estate agent in their area and list these properties for sale; but of course given the state of the real estate market at present, this isn't always a reliable way to get the property off of their books. Since the lender is so eager to sell these properties, they will generally accept a far lower price than the property is worth. Many lenders maintain an asset management department whose responsibility it is to get these properties off of the bank's ledgers. One strategy used by banks to do this is to bundle these REO properties into a bulk package, with each property being priced at only cents on the dollar.
Naturally, these bulk REO investments are an amazing opportunity for real estate investors who want to maximize their returns. An investor who has the know-how to find these bulk REO properties for sale and has access to the financing needed has the ability to do very well as an investor. Since the price of these properties is simply so low, the investor can turn around and sell the properties through a real estate agent, rent them for a sustained income, improve the properties or simply hold on to them, waiting for housing prices to rise before making their move.
Since there is an enormous amount of money to be made in the bulk REO market, it's a type of investment which anyone looking to invest in property should consider. However, new investors especially may need some assistance in closing the deal - if this is your first time dealing with bulk REO investments, you'll probably want to seek out an experienced real estate broker who has the skills, experience and contacts which can help you make this process a smooth one and your investment lucrative.
by: Duncan Wierman
Legal Advice When Negotiating A Mortgage Modification... Using Just Seven Simple Steps Will Save You Hundreds Of Dollars A Month Reviewing the Bedding Needs of Your Golden Retriever Choosing A Microscope: Compound Or Stereo Microscope? Important Advice On How To Write A Loan Modification Hardship Letters Loan Modification Guidelines - Standard Guidelines You Should Know About..... What Is A Fico Score?..... The Financial Solutions For Entrepreneurs Hit By The Recession Homerun Homes Celebrates 7 Years As The Marketplace For Rent To Own Homes Bankruptcy Is Not The End Of Your Wild World Loan Modification Hardship Letters - Three Must Know Factors That Will Make Or Break A Decision Why Buy A Home? Spend Your Money Your Way