Bulk REO Investing

With the American economy not being what it once was, investors are looking for ways to add to their portfolios and secure their finances. One investment option that is getting a lot of attention is the bulk REO market. Bulk REO investing is quickly becoming the hottest thing in the real estate world. Basically with bulk REO investing you are trying to generate profits by buying and then selling large groups of banked owned homes.

Seasoned investors who are familiar with and understand the ins and outs of the bulk REO market can quickly make a lot of money in a short amount of time. It is a skill to take bulk REO packages and turn them into huge profits. You have to remember that in most cases these homes are distressed, the were foreclosed homes that did not sell at auction. The bank sold them “as is,” which means if the people that lived in the home decided to destroy it before they were evicted, then the house is still in that condition.

If you are looking at bulk REO investing and buying from another investor, it is possible that you could get homes in better condition because investors tend to want to make a profit off of the sale. They do the inspections, if there are issues they generally tend to fix those issues.

Many people ask if they need to be wealthy to be involved in bulk REO investing. The answer is no, but you do need to prove that you have access to the funding that is needed to make a deal. Bulk REO investors and banks are not going to waste their time with people that cannot back up an offer they are making. As a matter of fact, the first thing they are going to ask for when you approach them about a bulk REO tape they have is proof of funds.

This can sometimes lead to bulk REO investors that are just starting out to look for partners. One person is the real estate savvy partner while the other is the money. The key to being a profitable bulk REO investor is knowledge. You can acquire this knowledge on your own or through a mentor, however you get it doesn’t matter, getting it is.

For example, you need to understand all the terms used in the bulk REO investing industry. Know what a daisy chain is; understand brokers and whether or not they are necessary. Understand what “as is” means. Know the difference between foreclosure and REO properties. You need to learn how to make an offer, what materials the seller is going to want to see. You should also understand market value and how where a home is located impacts that worth of the home.

You also need to understand ROI, or return on investment. You don’t want to buy a bulk REO tape for $200K, put in another $50K for improvements on the properties and then only be able to sell it for $150K. Take the time, do your research and obtain the knowledge you need to be a successful bulk REO investor.

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