The Basics Of Bulk REO Investment

April 22, 2010 by · Leave a Comment
Filed under: REO News 

This article doesn’t really talk about Bulk REO purchases but more about what makes a home that has defaulted on their mortgage turning into a REO property.

A bulk REO purchase is when you negotiate will the bank or a agent to purchase multiple properties.  You normally would ask for what the industry calls a “tape” which will have information about each property like the address, tax assessed value, bedrooms, bathrooms, square footage of home & lot and other information.

From the Tape you would then make a list of properties you are interested in making an offer on.  At the same time it would be in your court to do the due diligence on all the properties to get information on current condition along with information on the neighborhood they are located in.  If everything is in order at that point then you would make an offer for the package and see what the bank comes back with.  There is obviously more to it but there is a basic summary of some steps involved with this process known as “Bulk REO”. – The new opportunity is known as ‘Bulk REO Investing’ or ‘REO Package Investing’ and it’s a huge opportunity.

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

Understanding the notion of Bulk REO’s requires understanding of the foreclosure process.

As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. After a certain period, the lender will then formally begin foreclosure proceedings. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.

The defaulted property is ultimately auctioned, thus completing the foreclosure process. The lender regains ownership of the property if there are no buyers at auction. The designation of ‘REO’ (Real Estate Owned) is then attached to the foreclosed property.

REO properties are usually listed for sale with local real estate agents. But more and more, lenders are selling their REO properties for a greatly reduced price. But the price of receiving such great pricing is the need to purchase multiple REO properties (a ‘package’) rather than individual properties.


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