| The waves of foreclosures sweeping across the | | | | auction are then the property of the bank or other |
| nation have been nothing short of catastrophic for | | | | lender who hold the mortgage for the property. This |
| many homeowners, but the current turmoil in the world | | | | property is referred to by lenders as Real Estate |
| economy has at the same time opened up many new | | | | Owned, or REO for short. This creates something of a |
| opportunities for savvy real estate investors to build | | | | problem for the lender; by and large, financial institutions |
| wealth. Since there are simply so many properties on | | | | are in the financial services business, not the real |
| the market right now and prices are so low; especially | | | | estate business. As far as a bank is concerned, a |
| for foreclosed properties, there may never have been | | | | piece of real estate is an underperforming asset at |
| a better time than this very moment for getting into | | | | best and evidence of a poor investment at worst. This |
| property investment. Similarly, there may never have | | | | means that these institutions are generally very eager |
| been a better time to make a killing in this market. | | | | to be rid of these properties. |
| One of the new opportunities that has been made | | | | What these lenders usually do is to contact a real |
| available for investors looking to make the best of a | | | | estate agent in their area and list these properties for |
| bad situation is the exciting possibility of investing in | | | | sale; but of course given the state of the real estate |
| REO properties and especially bulk REO properties. | | | | market at present, this isn't always a reliable way to |
| There are many investors who are making substantial | | | | get the property off of their books. Since the lender is |
| profits with these investments as well as | | | | so eager to sell these properties, they will generally |
| forward-looking investors who are purchasing these | | | | accept a far lower price than the property is worth. |
| bulk properties and holding on to them or improving | | | | Many lenders maintain an asset management |
| these properties, waiting for the market to strengthen | | | | department whose responsibility it is to get these |
| before selling for an incredible profit. | | | | properties off of the bank's ledgers. One strategy |
| If you'd like to learn more about how real estate | | | | used by banks to do this is to bundle these REO |
| investors are making lemonade out of the lemons of | | | | properties into a bulk package, with each property |
| the foreclosure crisis and currently weak US real | | | | being priced at only cents on the dollar. |
| estate market, you've come to the right place. Keep | | | | Naturally, these bulk REO investments are an amazing |
| reading for a look at what bulk REO investing is and | | | | opportunity for real estate investors who want to |
| how it is done - and for that matter, what REO | | | | maximize their returns. An investor who has the |
| property is in the first place. | | | | know-how to find these bulk REO properties for sale |
| As you've probably figured out by now, REO investing | | | | and has access to the financing needed has the ability |
| has to do with foreclosed property; but what is the | | | | to do very well as an investor. Since the price of these |
| relationship between foreclosure and REO property? | | | | properties is simply so low, the investor can turn |
| Since the foreclosure process itself is something that | | | | around and sell the properties through a real estate |
| you are already somewhat familiar with, we can | | | | agent, rent them for a sustained income, improve the |
| probably safely skip over this part. As you know, | | | | properties or simply hold on to them, waiting for |
| foreclosed properties are generally sold at a public | | | | housing prices to rise before making their move. |
| auction if the homeowner is unable to become current | | | | Since there is an enormous amount of money to be |
| with their payments before the grace period provided | | | | made in the bulk REO market, it's a type of investment |
| for in their state has run out. | | | | which anyone looking to invest in property should |
| Most of the time, these properties find a willing buyer | | | | consider. However, new investors especially may need |
| at this auction; or more to the point, this used to be the | | | | some assistance in closing the deal - if this is your first |
| case. The huge number of foreclosures currently going | | | | time dealing with bulk REO investments, you'll probably |
| up for auction has meant that a lot of these | | | | want to seek out an experienced real estate broker |
| foreclosed properties end up going through the auction | | | | who has the skills, experience and contacts which can |
| without being sold. So what happens then? | | | | help you make this process a smooth one and your |
| Properties which don't find a buyer during the public | | | | investment lucrative. |