Getting involved in REO properties mean that you need to become familiar with all the verbiage that is out there. Bulk REO packages are very similar and often the same as a bulk REO tape. They can also be called a bulk REO portfolio. All of these terms are just fancy ways to say that a seller has more than one REO to sell. The important element to understand when dealing with bulk REO packages is what is in the package.
While making sure you know what is in the bulk REO package seems like a no-brainer, many new investors make the mistake in trusting the sellers they are dealing with. A seasoned bulk REO investor is going to take the time to see the properties they are getting ready to acquire before moving forward with the purchase. It is very important that you are aware of each particular of every transaction you enter into. Now, keep in mind that the particulars you need to know may change from one bulk REO package to another. The basics will be the same for each transaction though. You need to know enough information to know what the risks are in the purchase and what potential benefits are there.
This is due to the fact that a bulk REO package can have homes in there that range from excellent condition to homes that are not livable. This doesn’t mean that you skip on the bulk REO pacakage, it means that you take a look at the homes that are good and determine if they will offset the expense you will have in getting the other homes up to par to turn around and sell for a profit. You should make an effort to find out what the fair market value is of the each home. This can be done one of two ways, the seller can have a certified statement of value for each home or the real estate agent can do a comparison for you and tell you whether or not it is a good deal.
If the bulk REO package that you are considering purchasing is through a bank you need to know that in most cases you are buying properties “as is.” When you are dealing with individual sellers there is more room to negotiate, they may fix any problems that are found upon inspection. That will really depend on what they are looking to get out of the sale of the bulk REO package. While it may seem trivial right now, you need to take all of these things into consideration when you are making a bid. While the seller, bank or individual, wants to get the best deal possible you need to make sure you are getting a good deal as well.
In the grand scheme of things when talking about real estate investing, bulk REO packages, generally speaking are the safest bets. You will be able to inspect the properties; you will be able to do your research on each property and its location. You will be able to make an offer for anywhere between .32 and .40 on the dollar. There is another benefit to buying bulk REO packages in that there is less paper work to deal with and you are able to secure your own financing for these properties.