Bulk REO investing is a saving grace of many real estate inventors desperate to climb out of the recession hole. And with a good reason. Bulk REO is a sure way to bring in millions for pennies. All you need is nerves of steel, good guts, solid strategy and great love for what we all hold dear- money.
Love for money is a given if you take time to read this article. So are the guts if your bank account is on a ready. We will supply the strategy and nerves of steel come with practice so don’t worry about that for now.
After all, bulk REO investing all it is not much different than paying poker. With cards open. Oh yes! In Bulk REO all cards are on the table and your bank account better be on a ready. Rules are simple enough. Keep your cool, don’t expect miracles, don’t bet too high, be good for your money and for god sakes do not try to cheat- you will be caught. Play the right card at the right time and you will clean the table.
Interesting point of this article is that the banks are reportedly putting more effort into selling their real estate assets to free up space on their balance-sheet. Can you guess what the banks want this reduction in liabilities for? Not to make more loans, they want the money to acquire other banks that will be going under. That is pretty distressed news if you ask me.
With these problems in Europe ramping up and the geo-political risks growing in the Korean peninsula. It is becoming clear that the next leg down has started. With U.S. interest rates going down, it looks that safe haven buying has come back in full effect.
Investors are reported to be buying these loans for around .75 on the dollar, if we are in a full recovery then they may be getting good value for their money. But, if we are going to decline and have another round of defaults coming, it would not be a good time to purchase real estate that has not fully corrected to a fair value price.
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”.
FavStocks.com - 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.
BridgePoint Ventures West announced that it closed a deal on 2.5 million dollars of notes on foreclosed properties. They noted that the underlying asset with worth more so it worked out to be .18 cents on the dollar. BPV specializes in making bulk reo purchases on distressed real estate assets. Here is the release about the news.
BridgePoint Ventures West recently announced that their investor group has raised the necessary capital to purchase a $2.5 million dollar bulk REO portfolio directly from a major bank. The notes were purchased from the bank at a remarkable rate of just eighteen cents on the dollar. This particular bank was so impressed by the urgency in which BPV West acted that they’ve come to them again for a similar offering of $6.4 million dollars, again at 18 cents on the dollar, but gave them only 3 weeks to fund the entire deal.