May 20, 2024


Mad about real estate

Bulk REO Investor Profit Strategies

It’s not going to be news to any of you reading this article that we’re currently seeing an unprecedented number of property foreclosures in the US. Obviously the foreclosure crisis and the credit crunch which has followed on its heels are tragic situations for many and definitely deserve the title of crisis. However, this is also a time with an incredible number of opportunities for real estate investors who have the resources needed to take advantage of the situation and making investments now when real estate prices are at the lowest levels seen in many years.

One thing which is attracting a particularly large number of property investors at the moment is bulk REO investing, a real estate investment strategy which offers excellent prospects for profits and given the price of many of the properties currently on the market, these investments also provide the investor with an excellent profit margin.

Unless you’ve been doing a lot of research on your own or have some experience in the real estate market, you probably aren’t quite sure how to make profitable investments in bulk REO properties. In fact, you may not even be sure exactly what these properties are, other than they’re something a lot of people in the real estate business are talking about.

First, you need to know a little more about the process of property foreclosure, which is how bulk REO properties become available in the first place. We’ll assume you know the basics of how a home goes into foreclosure and avoid covering ground that’s been covered more thoroughly elsewhere. We all know that foreclosures are the ultimate result of a homeowner being unable to pay their mortgage. Eventually the property goes into the foreclosure process and unless the owner manages to bring their payments up to date before a defined grace period has elapsed, the home is sold, most often at a public auction.

When a home goes up for auction and is not sold, the property reverts to the lender. The property is then considered a REO property, Short for Real Estate Owned, the term originates in the record keeping systems used by banks and other financial institutions who provide mortgages and other financing for the purchase of homes. Since banks: 1) are not in the real estate business – and – 2) these properties represent a poor investment on the part of the lender, these institutions are eager to be write off these properties, even if this means selling the property at a loss.

Lenders often list these REO properties with real estate agents in an attempt to sell them, but in many cases the bank will package several properties at one very low price, often only pennies on the dollar; but anyone interested in buying these properties must buy them all as a single bulk purchase. However, for the experienced investor or savvy newcomer who has access to funding, these bulk REO properties can be a very profitable investment indeed.

The approach which many take in pursuing bulk REO investments is to work together with a partner who has access to funding sufficient to make these larger purchases. This is where things can get a little tricky for those who are new to the world of real estate investments, since creative funding strategies are sometimes called for to secure the liquid assets necessary. Investors who are interested in the possibilities and the enormous profit potential represented by bulk REO investments would do well to get in touch with real estate investment professionals who have the experience, the industry contacts and the financing know-how to make these unconventional but very lucrative investments a done deal.

There has never been a better time to get involved in real estate investment than the present – and with the opportunities offered by bulk REO property investments, there has rarely, if ever been more money to be made by investors. If you’re even the slightest bit interested in making profitable investments in foreclosed properties, investing in bulk REO properties is something that you owe it to yourself to look into.