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.