It is not as hard as the "gurus" would have you believe.

If you've been following the news and latest investing trends, then you are aware of the most profitable opportunity ever in real estate. I am referring of course to bulk reo investing. Never mind foreclosures and "short sale" investing, all you will accomplish at best is picking up the property slightly below current market value.

Bulk REO begins when the homeowners falls behind in their mortgage payments, then the long and grueling process of foreclosure begins. This can take anywhere from 3 to 9 months or more, depending on which state and how backed up the bank logs and courts are for the counties.

At the completion of this process, the properties become foreclosed homes. This is followed by an auction sale at the steps of the courthouse. Common to today's market, these houses do not sell and are purchased back by the issuing banks.

Once the banks take these properties back, they are assigned the infamous title of 'REO' or bank owned real estate. These REO properties are normally listed with Realtors also know as "REO Agents". These REO agents then try their best to sell these properties at market price to retail buyers or local investors.

This process leaves a sour taste in the banks mouth because it takes 6 months or more in addition to the 6 to 9 months during the foreclosure proceedings. In the meantime, the bank funds are bleeding keeping and maintaining these houses. Plus they are unable to lend out more money until they recoup enough to replenish their reserves.

Keeping in mind that banks are in the business of lending money and not selling real estate, they would prefer to sell these bad assets in bulk at a discounted rate, rather than liquidating them one at a time.

Savvy investors are taking full advantage of this "bank calamity" by taking down these BULK REO packages or "tapes" as they are commonly known. These tapes are purchased at huge discounts and then sold one at a time to local wholesalers and investors, hence the term "buy cheap and sell cheap" and still make a bundle. Or they can be sold to retail buyers over time and really stretch the profits beyond comprehension.

Bulk REO Packages give the average investor an amazing return on their investment. These packages range from as low as $200,000 to as high as $20,000,000 or more. The bigger tapes are usually traded between banks and insurance conglomerates; they're not for the average investor pool. But who cares, there is still a huge amount of money to be made with the smaller tapes.

The so called "gurus" will tell you that it is easy to buy these Bulk REO tapes directly from banks; but really, let's wake up people! When has it ever been easy to do anything with banks? Are we forgetting who got us into this current economic nightmare?

Unfortunately, this being such a lucrative trend it has spun a ton of pretenders, dreamers and scammers. Therefore, the best chance any investor has of getting their hands on a "real" bulk REO package is from a reputable Bulk REO Trader. Real REO Traders are usually backed up by Hedge Funds and being focused on a quick turn around only place a small premium on these tapes.

As an investor, you will still receive an incredible deal, perhaps even better than going straight to the bank. These hedge funds get deeper discounts due to their massive buying power.

Like in any business, do your research and make sure to play your cards right. Do not rush into anything, find a reputable Bulk REO Trader or company and call them. Don't be afraid to ask them questions.

Just make sure that you have the funds or know someone directly that has the funds to take down a tape. Or if you have a tape or know someone directly that has a tape to sell. If you notice, the key here is "directly", reputable traders will never entertain "daisy chains".

It does not take a fortune to get started but you can make a fortune once you get going.

Dangers of Working with a For Sale By Owner in the Orlando Florida area!!!!

I had a conversation with an owner of a For Sale By Owner recently that shocked me. 

Like most FSBO homes, they are overpriced.  Not a big surprise -- most For Sale By Owners are valuing their homes on emotion, what their neighbor's sold their Orlando home for two years ago or what they need to get out of the house. 

First off, I have to say the property is special in every way, I fell absolutely in love.  I want this Orlando home, it is my dream home.  It is a lovely lakefront property with fruit trees and lovely garden in a highly desirable community nestled on a quiet street backing up on conservation land.  This home has pluses and it has negatives.  It is adorable, but the negatives will keep many from purchasing it at reasonable list price, so it is no wonder this For Sale By Owner home is still on the market. 

I had great difficulty in achieving the value I assessed to the home by the For Sale By Owner for lack of compatible properties.  I could not justify the price that they had it listed for, and I am in love with this Orlando FSBO home.  This is the best house, on the best lot, with more upgrades than the average home in this community?  Anyone else see a potential problem?

Ok, I don't have rose colored glasses on.  There are aspects of this Orlando home that detour most of today's Orlando Buyers!  All the bedrooms are upstairs, small bedrooms, only a 1-car garage.  Obviously these negatives are affecting the ability to sell this For Sale By Owner home.

After sharing what I thought the home was worth, and why I thought it should be priced at my number, the owner asked that I keep the information between us.  They did not want anyone to know what I had come up with.   They thanked me for my advice and tips for selling their Orlando home.

This made me stop and think.   Why did they not want me to share my valuation?  And who would I share this with?   Perhaps I should take an advertisement out in the Orlando Newspapers sharing what I think all Orlando For Sale By Owner Homes are worth?  What are they thinking?  If I let the cat out of the bag they won't be able to sell?  I just shook my head and went on my way...

I came up with a couple of thoughts on this particular For Sale By Owner and Buyers in the Orlando Area and the current state of the Real Estate Market in Orlando Florida:

• The For Sale By Owner is stuck on how special the home is and not focused on the ultimate goal - the home SOLD!
• These owners have gotten valuations from several other Realtors who are desperate for the listing (it is an amazing Open House location) so they have told them what they wanted to hear
• Are sites like By Owner, Owners, FSBO, For Sale By Owner Advertising Services and For Sale By Owner helping these owners or taking money ad adding to the frustration to these vulnerable owners?
• This home at this price has competition from larger homes, with more to offer than a special location and charm.  Orlando Buyers want to purchase the best home for the least amount of money. 
• The FSBO believes everything I just told them, but would rather live in a fantasy world of what was not what is. 
• There are some incredible values, reasonably priced Orlando homes on the market.  If you are waiting for the perfect time, this is the time to get off the bench and get into the game!
  

Moral of the Story for Realtors:  Provide value to both Buyers and Sellers! If I, the experienced Orlando Realtor can figure this out, what is stopping another Realtor?  Stop telling Sellers what they want to hear and get real with Sellers!  Buyers and Sellers are using my services because of the value I bring to the table!  If I suddenly have a buyer looking for this type of house, I am going to educate them fully as to what the value is.

Moral of the Story For Buyers:  If you are shopping the For Sale By Owner market without an experienced Realtor you could overpay and not get the best home for you!  Worse yet, you are purchasing on emotion and could be making a mistake unknowingly.  An experienced Realtor can provide you with the information you need to make an informed decision.

Moral of the Story For Sale By Owners:  If your home is listed FSBO it is important to know that you need an experienced Realtor to guide you through the process of selling your home.  If one experienced Realtor came up with that valuation, others might come up with that analysis too!  You can't hide the truth, it always comes out...  So what is it?  Do you really want to sell?  Or are you having fun chasing the market down?  Can you really afford to keep doing what you have been doing?

This information is provided by Colleen Kulikowski, Realtor.  Colleen writes about the Florida lifestyle and Real Estate in Western New York.

Celebration Florida Homes  Marco Island Homes

Western New York Real Estate & Mortgage

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Visit our websites today for more helpful information:

• Greater Orlando Real Estate: Orlando Real Esate & Orlando Real Estate News
• Celebration Florida Real Estate:  Celebration Florida Real Estate & Celebration Florida Real Estate News
• International Real Estate:  Island Real Estate & Mexico Real Estate

This information is provided by Colleen Kulikowski, Realtor.  Colleen writes about the Florida lifestyle on several locations for the Orlando Avenue Top Team.

Celebration Florida Homes BLOG  Paradise Report Website  Marco Island Homes BLOG

(407) 288-0017
mailto:colleen@paradisereport.com