Investors who were badly burned in the collapse of the housing market in 2007 have been in the hunt for more opportunities to make a profit – and have discovered how investing in bulk REO listings can result in huge profit margins and significant return on investment (ROI). Now, as the practice matures and becomes more common, more investors and entrepreneurs are taking advantage of a surplus of bank REO properties and learning how to get into the practice of buying and selling in bulk.
Taking advantage of this process, as many find, involves finding and learning how to apply REO listings.
An REO property is a property that is owned by the bank after being previously owned. The bank takes possession of the property through foreclosure because it holds the mortgage on the property. When the mortgage cannot be paid by the previous owners, foreclosure proceedings are initiated. The property will usually be auctioned off at a foreclosure auction, which happens almost weekly all over the country. Sometimes, though, the property – for a variety of reasons – cannot sell at the expected value at the auction.
When this happens, the bank is left holding a property that is not generating any income. It just ‘sits’ on the bank’s list of assets, and is marked as a non-performing asset. The market crash of 2007 and subsequent recession has resulted in the market being flooded with thousands of homes that were foreclosed yet have not been sold successfully by banks. For investors and entrepreneurs, these homes are located conveniently in REO listings.
Formerly, investors were primarily interested in REO listings for individual properties for sale by banks. Since these homes were sold at a discount, they represented a prime buying opportunity for savvy investors. With the market crunch, though, the circumstances are a bit different. The surplus of REO houses on the market means that there are even more opportunities for investment.
Investors now are learning to take advantage of market supply by buying and selling in bulk, using several properties bundled into one package to make a profit. The profit margin on these bulk sales can be worth tens – if not hundreds – of thousands of dollars, and can insulate investors from the risk associated with buying and trying to sell one single property. The tool needed for these bulk transactions is found with REO listings.
Local REO listings are valuable tools because they provide, at a glance, a plethora of potential purchases for investment. It is not uncommon for entire sections of neighborhoods to be on the listings, which makes packaging them together in a bulk purchasing package relatively easy. Without REO listings, an investor will be flying blind; with a complete set of listings, however, the investor is given more options and more choices to fill his or her portfolio into an attractive REO bundle.
Learning to depend on REO listings is one of the first steps to learn how to break into bulk REO. Those interested should consult REO listings regularly to find scores of excellent buying opportunities for a bulk sale.