Basic bulk reo investing 101

Basic Bulk Reo Investing 101

The current economy in the US has generated more foreclosed property than any other time in history. Real Estate Investors however, are known for turning lemons into lemonade. Investors are finding huge profits in dealing with these distressed assets direct from the banks. This new opportunity is called Bulk REO investments.

Bulk REOs investing is when a bank will put together a package of distressed or foreclosured assets together in a «package» and sell them off in BULK. This allows them to get these distressed assets off their books quicker and clean their books. The bank will take a bigger discount to sell the package so the can get back to their main business of lending. Selling their «asset pool» in this manner, actually work out better for both the bank and the investor. There is a huge opportunity for making unlimited profit if you know how !

Understanding what this business entails will give you a new opportunity to create wealth for the savvy real estate investor. Knowing the ins and outs of REO investing may make this your biggest year yet.

Banks are the institutions which can provide you with a list of properties in bulk which has a very low resale value. This means that you will be able to purchase ten different buildings or structures for the price of two or there. This is an investor’s dream. The only problem is that it takes a few skills to actually be able to get near enough the right people in charge in order to be involved in a deal like this. This is because bankers and financers as well as the head honchos in the business of bulk REO are surrounded by big time investors. Bulk REO’s give investors the opportunity for vast acquisitions at low cost. For this reason, this is not a you must know the in and outs of the business if you want to get involved in it.

However, It is not impossible for beginners to break into. After all, everyone needs start somewhere. You will find many people who claim they have lists of proeprty when if fact they do not. This is because they sometimes get the notion that by saying they have a ‘list’ will get them in touch with big time investors. In essence, the ‘list’ is their only bait to attract investors.THis will back fire on you very quickly and get you blacklisted in the industry.

A legitimate deal, however, is a win-win situation. An investor who has concrete relationship with the selling bank with a true bulk REO list, equals a very good and profitable deal in front of them.

Middlemen who act between these the buyer and selling parties may just make a very sizable income. Hundred of thousands of dollars can become his commission just by being at the right place at the right time, and knowing the right information.

Remember that if you are a newbie, if you are just trying to break into the «game», you might be getting involved in a «daisy chain».

Daisy chains are a chain of people claiming they have direct access to a ‘list’ of property for sale as long as you have the finances available. However, it turns out they don’t have the list at all.

In other words, they want a ‘cut’ of the bulk REO sale and are hoping to put you together with the people up the ladder. The only trouble is, there are a line of people that are lining up around the list, and it is unlikely a deal can be made this way.

My advice is to stay away from daisy chains, get yourself some education on how this business works, and find your own tapes. Buyer will be lining up at your door for real deals.

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