June 23, 2024


Mad about real estate

What is the state of the Bulk REO Market?

If you’ve been out of the bulk REO market for a while or if you’re a newcomer to the world of real estate investment interested in the idea of making a significant profit by investing in bulk REO properties, one thing is certain: you’re looking for some news on the state of the bulk REO market. If so, you’ve come to the right place – keep reading for a quick update on how things are looking at present in the exciting field of bulk REO real estate investments.

As you may or may not know, there was a small dip in the resale values of REO properties from late 2008 to early 2009, but it appears that we may have finally hit the end of the trail as far as the decline in prices is concerned. What does this mean to you as a real estate investor? Simply put, now is the time to buy.

While prices are slowly starting to turn around all over the country, California is particularly strong just as it always has been, with prices and resale values on the rebound – and also among the highest in the country. The Midwest still offers some of the nation’s lowest prices on bulk REO properties, though also some of the lowest; and most slowly recovering resale values.

For real estate investors who don’t mind holding on to their investment properties or pursuing other income generation strategies such as turning their REO purchases into rental or rent to own properties, there are some excellent values to be had in the Midwest, especially in and around larger cities like Chicago, Columbus and Minneapolis.

The same holds true for the mid-Atlantic region and the south, with prices in some areas at historic lows. These areas are ripe for investment by investors who have a longer-term investment in mind, with metropolitan areas such as Baltimore and the entire Baltimore/Washington D.C./Northern Virginia region and Atlanta being excellent areas for investment. Also worth looking into are bulk REO investments in Charlotte, Orlando and the entirety of central Florida; there are many foreclosures and a lot of potential for profitable property investment here.

Getting back to the idea of using bulk REO properties as a source of rental income, a lot of REO investors are finding this to be a lucrative source of revenue at present. While this is likely to change in the near future, it’s a winning strategy for investors who are looking to the future and intending to sell their REO investments once the housing market firms up and these properties can command prices high enough to net a substantial profit. However, many of these investors are maximizing their returns by renting these properties in the meantime, making their properties profitable investments even as they continue to hold and wait for the time to be ripe to sell them and really make money on the deal.

Again, the talk within the industry is that we seem to have either hit bottom already or be very close to doing so, so even those investors who are interested in turning their investments around for a quick profit won’t have long to wait. In fact, many bulk REO investors are already managing to do so, especially in growing metropolitan areas where the demand for housing remains strong, particularly in the Northeast and some of the growing cities of the Southwest. The southwest in particular has been hit hard by the foreclosure crisis, making this one of the regions of the country that REO investors will definitely want to have a look at when trying to find bulk REO properties which can make a profit for them in the short term as well as over a longer period of time.

Remember, just because you purchase a bulk REO package, you don’t necessarily have to sell them all at once. You may find the best investment strategy to be immediately flipping some properties to other investors while renting some and simply holding on to yet others until the time is right to make a sale. Not every real estate investor pursues a diversified strategy such as this, but if you have the backing of an experienced real estate broker or Realtor, you may be able to come up with some creative investment strategies of your own which maximize your return.

In short, the state of the bulk REO market is strong – and the potential for extremely lucrative investments in foreclosure properties is stronger than it has ever been. With a economic recovery and stronger housing market just around the corner, the time to invest in bulk REO seems to be right now.