I have to laugh at the people who say now is the time to hunker down and ride out the recession. Are you kidding? Now is NOT the time to hunker down! Heck, if I did that when the bottom fell out of the real estate market I wouldn't be here today. These are the times when fortunes are made.
In this economy, the opportunity to be a millionaire is yours, if you become a Bulk REO (Real Estate Owned) investor. Bulk REO's are foreclosed properties owned by banks that are packaged together, and sold at steeply discounted prices.
Everyday people can benefit from this new real estate concept because banks no longer want the “financial headache” of paying property taxes, hazardous insurance, utilities, and maintenance costs attached to these distressed properties.
Banks, and other lending institutions, are not in the business of managing properties. They provide hard money (aka cash) and credit to clients; therefore banks have no financial gain by having properties on their books. Now, you have the chance to buy these bulk REO's at a fraction of the cost.
Traditionally, after a property becomes repossessed and classified as REO (Real Estate Owned), the bank will attempt to resell the property to the public on its own, or solicit the services of an REO Asset Manger.
The problem in this economy is the overwhelming number of foreclosed properties, compelling banks to seek non-traditional ways to get rid of their “toxic assets”. Selling properties in Bulk REO is the most efficient way for banks to balance their financial books while remaining in compliance with Federal and State bank regulations.
This creates tremendous opportunities for you to become one of the new millionaires in this recession. It may not happen overnight, but in today's market, Bulk REO investing can be extremely profitable.
In addition, Bulk REO's are affordable-with prices below MLS listings, below BPO, cheaper than private sellers, cheaper than auctions at the courthouse, and at a fraction of any approved short sale price.
Here's a heart-wrenching story the writer James R. Hagerty shares about Alberta and Arthur Bailey, who live in a bungalow in LaPlace, La. Mr. Bailey is 69 and worked in an auto-body shop most of his life but was forced to retire after a stroke in 2002.
They bought their home in 2003 and then got an offer to refinance their home with the $33,000 in equity so they could repair the roof and install new doors. But they ended up with more debt than they could handle on $1,600 in Social Security payments, plus food stamps. They may qualify for the government's new refinancing program but no one knows for sure. Meanwhile, the Bailey's are facing foreclosure.
Now, that same property could be part of a Bulk REO package. You could purchase it at a discount and re-sell it to an investment fund and profit on the transaction, and the investment fund could refinance the Bailey's mortgage and reduce their payments. Or, you could “cherry pick” the property as part of the package and offer to refinance the Bailey's mortgage yourself – and still make $20,000, $30,000 or more in profit. And the Bailey's would be thanking you over and over for how you saved their home! It's not an uncommon story.