| You've probably heard about the incredible investment | | | | real estate investors. |
| opportunities currently available in the US real estate | | | | If you're interested in bulk REO investments, the good |
| market which foreclosed properties represent. You | | | | news is that this is actually an incredible time to get |
| may also have read about REO and especially bulk | | | | involved and make a fortune in the real estate market; |
| REO properties. Before we go any further, let me | | | | but you need to be very careful about who you do |
| explain what a REO property and a bulk REO | | | | business with. Keep reading for a few tips on how to |
| property is for the sake of those readers who are not | | | | spot fraudulent operators working the REO market for |
| yet clear about what this term means. | | | | victims. |
| REO property refers to properties which have gone | | | | First of all, approach the online real estate forums with |
| through the foreclosure process as per usual and | | | | caution. These are good places to do a little research |
| have gone on sale in a public auction. It used to be that | | | | on the market and to find out what other investors are |
| these properties would almost always sell at auction, | | | | doing and what's getting results for them. However, |
| largely to investors eager for a great deal on an | | | | these forums are also frequently the haunts of |
| investment property. However, the enormous number | | | | scammers on the lookout for naïve real estate |
| of foreclosures currently going on in the US means | | | | investors looking for a profitable investment. While it is |
| that many of these properties now go unsold and | | | | definitely a good idea to check out the forums, it's |
| become the property of the bank or other lending | | | | almost definitely not a good idea to actually look for a |
| institution. | | | | business partner here. |
| Referred to as Real Estate Owned (or REO), these | | | | Beware of any unrealistic claims of prices, revenues |
| properties are assets which financial institutions | | | | and especially of anyone purporting to have "direct |
| generally do not want. Since these are assets which | | | | connections to banks" or any other source of financing. |
| aren't keeping as far as banks are concerned, they | | | | If you look at these people's posts carefully, you'll often |
| become the responsibility of these institutions' asset | | | | notice that they're using free email accounts from |
| management departments, who are charged with | | | | Yahoo and MSN; if these people were genuinely the |
| getting these properties off of their employers hands. | | | | successful real estate brokers they claim, how likely is |
| One of the ways that they do this is to list the | | | | it that they'd be using a free email account? If nothing |
| properties in question with real estate agents, | | | | else, it gives a highly unprofessional impression which |
| attempting to sell them at fair market value. However, | | | | should make you think twice about doing business with |
| in the weak housing market we're dealing with at | | | | them. |
| present, this is often an ineffective way to find a buyer | | | | You'll probably also notice their atrocious spelling and |
| for these REO properties. In the interest of being rid of | | | | grammar, another sign which is far from encouraging. |
| these assets, lenders are often willing to sell them at | | | | True, not all of us are spelling bee winners or |
| deeply discounted prices, often 30% or lower than the | | | | necessarily good with written communication, but again, |
| going rate. | | | | a professional will generally come off as such in writing. |
| When lenders are left with a large number of these | | | | You should also beware of anyone who uses affiliate |
| properties, as many lenders are at the present, it | | | | marketing-style online tactics like landing pages and |
| creates a troubling situation which they have come up | | | | similar methods to get your business. What you should |
| with a creative solution for. This, of course is the | | | | be on the lookout for is a reputable realtor or broker |
| concept of bulk REO properties. For the bank, it's | | | | who has a long history in the field, can prove to you |
| simply a way of getting these assets off of their | | | | that they actually own (or have the owner's mandate |
| books; but for real estate investors, bulk REO can be | | | | to sell) the bulk REO properties you're interested in. |
| a dream come true. | | | | There is one question which can help you to weed out |
| These bulk REO investment opportunities have | | | | 99% of the fake and fraudulent bulk REO sellers |
| generated quite a buzz among investors since they | | | | which you should always ask: "how many deals have |
| potentially a very lucrative investment in most cases. | | | | you closed?". Don't be satisfied with a mere number |
| However, the fact that there are so many | | | | though; ask for verifiable proof - any legitimate seller or |
| newcomers to the real estate business getting | | | | broker will be happy to provide you with this |
| involved due to these very profitable investments has | | | | information. |
| led many wolves in sheep's clothing to set up shop - | | | | There is a lot of money to be made in bulk REO |
| and they often find many easy targets among novice | | | | investment - as long as you're careful out there. |