Bulk REO Investing In This Current Market
Bulk REO Investing is proving to be one of the most lucrative fields of investment during 2009 and beyond. Bulk REO Investors profit by purchasing groups (commonly called portfolios) of properties from lenders who have repossessed the properties and have urgent need to release pressure from their balance sheets. Due to the urgency of the balance sheet needs of the financial institutions coupled with the investors ability to buy a package of REO properties rather than individual properties, its frequently possible for a well-capitalized bulk reo investor to acquire REO packages at extremely attractive prices.
Most investors make offers to financial institutions on the basis of a percentage of unpaid principal balance. This means that if they make an offer of 60 cents on the dollar for a package of mortgages with a remainder of $3,000,000 in principal balance, then they pay $1,800,000 to acquire that package.
At the conclusion of our reo portfolio transactions, we own multiple properties which must then be monetized to bring a return to our fund. To do this, we resell our properties to retail home buyers via seller financing. By cutting traditional lenders out of our transactions, we are able to sell our properties quickly and at very attractive terms.
Find out when the banks financial quarter ends. This is where they report their quarterly earnings and financials and when most of upper management get evaluated for bonuses. Just like any business, banks dont want to have these underperforming assets on their books especially when their earnings reports are due.
Valuate the properties, figure out what you need to get them for, and put in your second (or third) best offer (do not give your best offer first).
Negotiate until its a win for all: you get to have several properties at lower than market value the bank walks away with those deals off of their books just in time for the quarterly earnings reports to shareholders.
The future seems bright for savvy Bulk REO investors. - 23229
Most investors make offers to financial institutions on the basis of a percentage of unpaid principal balance. This means that if they make an offer of 60 cents on the dollar for a package of mortgages with a remainder of $3,000,000 in principal balance, then they pay $1,800,000 to acquire that package.
At the conclusion of our reo portfolio transactions, we own multiple properties which must then be monetized to bring a return to our fund. To do this, we resell our properties to retail home buyers via seller financing. By cutting traditional lenders out of our transactions, we are able to sell our properties quickly and at very attractive terms.
Find out when the banks financial quarter ends. This is where they report their quarterly earnings and financials and when most of upper management get evaluated for bonuses. Just like any business, banks dont want to have these underperforming assets on their books especially when their earnings reports are due.
Valuate the properties, figure out what you need to get them for, and put in your second (or third) best offer (do not give your best offer first).
Negotiate until its a win for all: you get to have several properties at lower than market value the bank walks away with those deals off of their books just in time for the quarterly earnings reports to shareholders.
The future seems bright for savvy Bulk REO investors. - 23229
posted by X - Men @ 6:52 AM
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