The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.

‘Bulk REO Investing’ is the name of the new strategy, and it’s captured the attention of many well-heeled investors.

Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.

To understand investing in Bulk REO, you have to understand the foreclosure process.

As a borrower becomes increasingly behind in his mortgage, the lender regularly calls and writes the borrower with default warnings and threats. After a certain period, the lender will then formally begin foreclosure proceedings. The name for this period is ‘preforeclosure’.

The defaulted property is ultimately auctioned, thus completing the foreclosure process. If there are no buyers at the foreclosure auction, the lender regains title to the property. The designation of ‘REO’ (Real Estate Owned) is then attached to the foreclosed property.

REO properties are usually listed for sale with local real estate agents. However, lenders are increasingly willing to take much less than their REO asset is actually worth. Lenders are willing to do so in exchange for the buyer’s agreement to purchase a ‘package’ of REO’s rather than a single property.

The recession in the United States has yielded huge profits to real estate investors prepared to take advantage. REO packages are easiest to buy and sell with a well regarded source of financing in place. There are many sources of funding for these transasactions including: hard money and commercial financing, as well as non conventional sources such as hedge funds and private investors. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Salvatore Bushemi of Dandrew Capital Partners, a New-York based hedge fund.

A number of things likely come to mind when you think of virtual real estate investing. If you are already familiar with real estate investing you may think of short sales, bulk reo investing and virtual real estate investing or you may think of it in terms of real estate portfolios and real estate retirement plans or even hard money lenders. You may also consider what roles these things play in your life as a real estate investor in different economies.

You will need to know a lot about real estate investing. Knowing the basics of real estate investing education is a good way to get the most out of every lesson. Whether your target is short sales, bulk reo sales, virtual real estate or improving real estate investor abilities, you need to know some real estate investing basics. Here are three main real estate investing concepts that many experts do not even know:

1. You will always get a positive yield with real estate investing education. Every real estate deal has the potential to create thousands of dollars in potential wealth. Knowing about getting that wealth is the key in the end to your success. Learning as much as possible about real estate will increase your odds of success whenever you do a real estate deal. A small investment in your education can yield big results when you implement your learning.

2. Real estate investing success is possible in any economy. Lots of people believe that real estate success is only possible in a booming economy. In reality, poor economies are great for real estate investors. You will likely find properties that you can buy at deep discounts. Also, you might find deals that simply could not exist in a booming economy. Real estate investing often is what turns the tide for poor economies. When an economy is less than thriving, short sales, bulk reo sales and virtual real estate can prosper. You will have the option of saving yourself and possibly others from serious financial difficulties if you know about these types of deals.

3. You do not need a lot of money to be a successful real estate investor. You can be a success in real estate investing no matter how much money you have on your own. There are lots of types of deals that you can perform with the money of other people. If you look like a good investment a private lender may let you use their money. A good investment will know as much as they can about real estate investing. This will help you show private lenders that you are a good investment if they do not know about real estate investing themselves.

Real estate investing is a great way to create a good amount of wealth. You can create income regardless of the economy. Using knowledge of real estate investing, short sales, bulk reo sales and virtual real estate you will be able to create success for yourself. Knowing the basics of real estate investing will help you succeed as a real estate investor. Knowing some real estate investing basics (beyond what older gurus like Robert Allen teach) and applying them will help you succeed as a real estate investor.

Great real estate investing resources are available at RealEstate.BryanEllis.com.

There are more foreclosures in the United States right now than we have ever experienced before. Yet well-funded investors in real estate are seizing upon this opening to profit from an profoundly profitable new opportunity.

This new opportunity - known as ‘Bulk REO Investing’ - is so huge it’s captured attention from wealthy investors and private investment funds alike.

Consider with me, if you will, the fundamentals of the Bulk REO business.

To understand Bulk REO investing is to understand the foreclosure process.

As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. The lender directs the subsequent timing of the actual foreclosure proceedings. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.

The defaulted property is ultimately auctioned, thus completing the foreclosure process. If there are no buyers at the foreclosure auction, the lender regains title to the property. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ property.

Typically, lenders list their REO properties with local real estate agents in hopes of selling the property to a retail buyer who will pay full price. But as a consequence of the weak economy, lenders are frequently selling their REO properties far below their actual value. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.

These REO packages represent the potential to acquire huge amounts of equity for savvy real estate investors. Bulk REO Investors are most successful when they have a well-established source of funding for their REO packages. Some sources of funding for these transactions are: personal funds, hard money lenders, commercial lenders and non-conventional sources such as private investors and hedge funds. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Sal Bushemi of Dandrew Partners, a New-York based hedge fund.

The Obama foreclosure rescue strategy makes sure that there are more new loans available in the housing market, recommends the approval of more loan refinancing applications, and stimulates an increase in the number of permitted loan modifications by banks and lenders.  The Helping Families Save Their Homes Act is the legislation that was approved by the President himself in May 2009 is tasked with supporting the strategy.  This new law has the goal of introducing several improvements to the older Hope for Homeowners Act that was designed to help homeowners who had suddenly found that they had underwater mortgages.

One of the key factors in the Obama foreclosure rescue initiative is to help homeowners in their goal of convincing the lenders to provide them with a refinancing of their loans to minimize the possibility of a foreclosure because their monthly payments will be more affordable.  An important qualification is that the outstanding and unpaid loan amount should not exceed the prevailing market price of the home by more than five percent.  Another factor in the Obama strategy is to provide an incentive to the lender every time he permits a loan modification that has the effect of reducing the monthly payment so that it does not exceed 31 percent of the homeowner’s monthly salary.  The Obama foreclosure rescue strategy also helps Fannie Mae and Freddie Mac offer more new home loans by infusing more capital into these two corporations.

However, statistics that were gathered for September 2009 have shown that the Obama strategy did not have a large influence on home prices and foreclosures.  Those who were against the plan quickly capitalized on the observation and claimed that it had little chance of succeeding because of its deficiencies.  But those who are in favor of the Obama foreclosure rescue strategy pointed to several positive results.  The initiative is touted to be the primary cause for the reversal of the downtrend in home prices and the increase in foreclosure filings in several states.  But those who do not favor the President’s program were not satisfied, pointing to the small number of approvals for loan modifications despite the large number of homeowners that should have qualified.  Moreover, several opponents of the Obama foreclosure rescue strategy have claimed that it does not have a solid economic foundation.  However, the Obama Administration remains faithful to the plan, touting its achievements, such as the milestone that was reached when more 500,000 loan modifications were approved. More details can be found at http://www.bestforeclosurenews.com

For investors or residents who are considering purchasing a foreclosed home, there are often repairs needed that should be considered when agreeing on a purchase price. The difficulty with foreclosed home purchases that are especially done at auctions is the inability to inspect the home prior to purchase. Foreclosed home investors need to have an idea of common repairs and pitfalls associated with purchasing a foreclosed home in order to firmly assess whether or not they are getting a good value for their dollar.

Call for a Dumpster to remove trash and debris

Some investors might be lucky enough to snag a foreclosed home that is intact. Others will be facing huge amounts of clean up. Some foreclosed homes have been neglected while others have been damaged by vandals. The types of damage left behind in these situations are often cosmetic and simply need a major clean up which can involve the following types of repairs:

•    Personal items and debris left throughout the home
•    Removal and replacement of carpet
Repair or refinishing of hardwood floors
Damage to the sheetrock caused by punching holes in the walls or damage caused by exposure to water
•    Bug infestations and rodent removal
Some major repairs that could potentially be looming involve the structure or other major elements of the home such as plumbing. Many of these expenses can break the deal on whether you will be getting a great price on the foreclosed property:
•    Burst pipes or leaking pipes that could have damaged anything from the walls to the     floors
•    Electrical upgrades to meet code requirements
•    Foundation problems including leaking and faulty support systems
Mold resulting from poor ventilation

In damaged homes, many of these major repairs are not discovered until well into the process of rehabilitating the house. In traditional home buying there is a level of expected disclosure that allows a homebuyer to exercise some disclaimers or even warranties on the previous homeowner during a specified amount of time. This is simply not the case in foreclosures where in most cases it is an ‘as is’ purchase.

A Quick Exit

When home owners are forced from their homes, many do so unwillingly. Consequently, they will leave with nearly everything that can be removed from the home including lighting fixtures, kitchen appliances, the washer and dryer, air conditioning units, ceiling fans and anything else that is removable. Adding up quickly, these expenses need to be considered when bidding for the property. Most of these items are also easy to have replaced but with average expenses for middle range appliances totally as much as an additional $5,000, this could put a major bite in your budget.
While buying brand new fixtures and appliances would be ideal, it just doesn’t always fit into the finances. One of the next best things is purchasing reconditioned appliances from major home improvement or department store appliance outlets. The appliances that have been used as display models or even other appliances that were sent to a customer and returned are all typically un-used an often not affected by anything visibly noticeable. There are also warehouses and salvage shops which sell these gently bumped appliances, older models that have been replaced on the showroom floors or even used/refurbished fixtures and appliances.

For foreclosure buyers wanting to create a home for themselves, there is more concern over the long term quality and warranties associated with appliances. For investors looking to purchase the property for re-sale purposes, it is important to consider the type of home being sold and then purchase accordingly.

Higher end home buyers will likely demand new appliances and lighting fixtures that match the aesthetic of the home. Other details that are important are matching brands of all appliances and having the same finishes on the fixtures. Middle to lower range home buyers will be more inclined to accept the property as it is with the intent to repair or replace items going forward.

Things You Can’t See

Investors walking into a home they have just purchased from the foreclosure sale may be overwhelmed with the project on their hands. The types of repairs the house obviously needed could be pricey enough, such as exterior upgrades, landscaping improvements and interior re-furbishments. What the buyer can’t see is often where the most trouble lies however. The following types of repairs are pricey problems that can be difficult to detect without fully inspecting the home and even opening the walls and getting on the roof investigate:

•    Mold in the attic and lurking behind sheetrock, particularly in bathrooms
•    Uneven and rotting floors due to previous water damage
•    Permanently damaged wood floors due to pet stains
improper drainage causing flooding during rainy season
•    Tree roots within the sewer pipes leading to blockages
•    Structure deterioration from pests such as termites

These types of issues are difficult to spot when initially evaluating the repairs necessary on a foreclosure, even if the house has been well taken care of. These hidden problems are why experienced home inspectors are incredibly valuable to a homeowner.
Buying a foreclosed home can appear to be a great bargain. However, without having a thorough inspection before purchase and very little recourse for major repair issues, it can be very difficult to have an accurate gauge on your actual cost at the very moment you are establishing a purchase price. By keeping in mind the potential for the many common repairs necessary for a foreclosure, investors can be more prepared when considering the value they are receiving for the foreclosure price.

Typically the lenders owning foreclosed properties have not provided potential investors with the ability to view the homes ahead of time because the home is being sold in an as-is condition. This holds true when a home is sent to auction. Working with a real estate agent experienced in foreclosures can be a major asset in making sure you have a thorough inspection. Experienced agents can help guide you through the paperwork process to ensure you don’t succumb to common pitfalls.

Deciding to Use an Inspector

For any foreclosure buyer, the opportunity to use a certified home inspector prior to the purchase of the property should never be undervalued. The inspector can help to advise on issues that would cause you to lower your bid price as well as provide a report which shows the mortgage holder the extent of damage and repairs that will be required, further justifying your price. The cost of an inspector can sometimes be wound into the purchase deal with the lender, but more often it is exclusively out of the pocket of the buyer and can run about $250-500 for average, single family home dwellings.

On the surface, the property may appear to have no major issues, until the inspection is completed. A professional inspector would be able to provide advice on details such as changing the slope of the ground leading to the foundation of the house which will eliminate the leak that consistently shows up on rainy days. Otherwise as an investor with limited home evaluation experience, you might have thought you had a leak in your foundation and hired contractors for water sealing when this would in no way prevent additional issues.

Finding and Using an Inspector

One of the benefits of using a real estate agent is their industry contacts. A buyers agent typically has several preferred inspectors who can help to review your property prior to initializing a bid contract. There are also several websites available which ranks contractors and other real estate service agents according to actual customer experiences. Once you decide on an inspector to use, your agent will schedule a time and date for the inspection with your contract timetable. The potential investor is typically present while the inspector reviews the property and can gain key points of information about current home issues or potential future ones as the inspector creates their report.

Based on the findings of the inspection report, the buyer can choose to cancel the transaction, use the report as a negotiating tool or move forward with it. With the help of the home inspection report, a motivated banks could be persuaded to reduce the purchase price to prevent the buyer from canceling the sale. This is not the same level of detailed repairs that can exist between a traditional home buyer and seller, but it is similar in nature based on the report findings. A mortgage lender is not typically interested in retaining a property so in the event they have an interested buyer, they can be willing to negotiate the deal.

The Consequences of No Inspection

What an inspector doesn’t guarantee, is that they have captured every flaw. A homeowner who has purchased a foreclosure that is suddenly faced with plumbing that doesn’t work right cannot take it up with the inspector. In general, a professional inspector is certified by local, state or industry guidelines and is providing a review of the safety, quality and overall condition of a property. Some of the items an inspector might find can be serious code violations by local or industry standards while others are simply small issues that are more cosmetic in nature.

Some foreclosure buyers opt to forego an inspection because of either the cost to them personally, the time it might take that you worry will jeopardize the deal or because you believe it won’t make any difference, you want the house any way. These are very critical errors that can lead to huge headaches. If a foreclosure opportunity is available and provides the option for an inspection, a potential buyer should definitely consider the ramifications closely if they think declining will save any time or money. The additional information obtained by performing a home inspection can justify the purchase price and provide a hit list of repairs if any that need to be completed.

Bank foreclosure is a term that is commonly referred to as just foreclosure and this process is started by the bank/ lender/ mortgagee in order to get the court order to sell the real estate of the mortgager to pay for the loan outstanding. Basically foreclosure would take place if you were not making payments on your mortgage and the seller of the home or lender of your mortgage was forced to sell the house in order to receive the money owed for your mortgage.

Foreclosure is a very common problem, as many people go into the home buying process thinking that they will be fine, only to find out one they are actually in it that they have so many other bills or bought a house that was too expensive and they are simply unable to make their mortgage payments

Many people do not want their purchased homes to be sold by foreclosure because of sentimental issues and also because you will find that you have to put a lot of effort in purchasing a new home; in addition you will find it extremely difficult to get finances for your new home because of your poor credit rating.

Tips

May be you could avoid your home foreclosure if you follow the advice given here. First and foremost thing is that you should always prepare a household budget. Make a list of your household expenses, both essential and nonessential and compare the total expenditure with that of your total household income. It is best to write out the amount that you and your partner are making each month, as well as the total amount of all your bills.

The objective of preparing your budget is to monitor the expenditures against income and to facilitate this, you must make a list of expenditure items in the descending order of their value; this exercise will indicate the high, medium and low value items of your expenditure and then you could decide the expenses that are essential as well as nonessential. For instance you may have bills that you are paying which could be held off for a bit or even eliminated altogether. 

There are more foreclosures in the United States right now than we have ever experienced before. Yet well-funded investors in real estate are seizing upon this opening to profit from an profoundly profitable new opportunity.

This new opportunity - known as ‘Bulk REO Investing’ - is so huge it’s captured attention from wealthy investors and private investment funds alike.

Consider with me, if you will, the fundamentals of the Bulk REO business.

To understand Bulk REO investing is to understand the foreclosure process.

As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. The lender directs the subsequent timing of the actual foreclosure proceedings. ‘Pre foreclosure’ is the name given to the time between implementation of the foreclosure proceedings and the public auction.

The defaulted property is ultimately auctioned, thus completing the foreclosure process. If there are no buyers at the foreclosure auction, the lender regains title to the property. This property is then considered to be ‘Real Estate Owned’ by the lender, also known as an ‘REO’ property.

Typically, lenders list their REO properties with local real estate agents in hopes of selling the property to a retail buyer who will pay full price. But as a consequence of the weak economy, lenders are frequently selling their REO properties far below their actual value. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.

These REO packages represent the potential to acquire huge amounts of equity for savvy real estate investors. Bulk REO Investors are most successful when they have a well-established source of funding for their REO packages. Some sources of funding for these transactions are: personal funds, hard money lenders, commercial lenders and non-conventional sources such as private investors and hedge funds. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Sal Bushemi of Dandrew Partners, a New-York based hedge fund.

Bank foreclosure is a term that is commonly referred to as just foreclosure and this process is started by the bank/ lender/ mortgagee in order to get the court order to sell the real estate of the mortgager to pay for the loan outstanding. Basically foreclosure would take place if you were not making payments on your mortgage and the seller of the home or lender of your mortgage was forced to sell the house in order to receive the money owed for your mortgage.

Foreclosure is a very common problem, as many people go into the home buying process thinking that they will be fine, only to find out one they are actually in it that they have so many other bills or bought a house that was too expensive and they are simply unable to make their mortgage payments

Many people do not want their purchased homes to be sold by foreclosure because of sentimental issues and also because you will find that you have to put a lot of effort in purchasing a new home; in addition you will find it extremely difficult to get finances for your new home because of your poor credit rating.

Tips

May be you could avoid your home foreclosure if you follow the advice given here. First and foremost thing is that you should always prepare a household budget. Make a list of your household expenses, both essential and nonessential and compare the total expenditure with that of your total household income. It is best to write out the amount that you and your partner are making each month, as well as the total amount of all your bills.

The objective of preparing your budget is to monitor the expenditures against income and to facilitate this, you must make a list of expenditure items in the descending order of their value; this exercise will indicate the high, medium and low value items of your expenditure and then you could decide the expenses that are essential as well as nonessential. For instance you may have bills that you are paying which could be held off for a bit or even eliminated altogether.

Help for prescriptions is available if you qualify. If you are without medical insurance or your program does not pay for your medications, receiving the prescription medicine you require could be expensive. Help with prescriptions can make your recovery go a lot faster. This is particularly true with brain cancer patients.

Let’s say you have been getting chemotherapy, but it creates an upset tummy, so you are prescribed a anti-nausea prescription medication to go along with it. Chemo will often cause you to grow to be anemic so an iron supplement is frequently prescribed. This list can go on and on. The bottom line is that the prescription medicine costs for a cancer patient paying out of pocket could go over a mortgage payment! At this point you need to turn to a prescription program assistance.

What are you to do when you need help paying for your medicine?

You certainly don’t want to stop taking your medicine. There are several plans provided that provide free and reduced cost patient assistance.

• Social Worker- Most hospitals have got a social worker which could help you locate grants and other plans aimed at helping you with your healthcare requirements. This must be your initial stop in looking for aid. Constantly notify your general practitioner if you cannot pay for drugs or treatment. He or she may well know of a package personally to assist you, also.

• PPARx- The Partnership for Patient Assistance is a company designed at assisting residents who can’t pay for their prescription medicine. They have created a database of in excess of 425  programs and more than 5000 medications provided for reduced or no cost assistance. They assist in determining what you are qualified for and applying for the aid. The benefit is free and provided online.

• Drug Companies- A large number of citizens would not assume drug companies offer assistance, on the contrary countless will. Gsk provides a medicines program for patients taking their drugs and can’t come up with the money for them. Find the maker of the medicine by asking your physician or pharmacist and try out their web site for medicines assistance programs.