Savvy investors are purchasing foreclosed properties in bulk REO packages, which are commonly referred to as tapes. In the current economy, banks and other lenders are overwhelmed with foreclosed real estate and have a serious accounting incentive to get such liabilities off of their books. In doing so, many are requiring investors buy properties in bulk in order to more rapidly unload their real estate surplus. Investors are also finding that they are able to more easily acquire multiple properties in a single transaction for much less than what they would pay for a single property.
Why are So Many Foreclosed Properties Available Now?
A poor economy, which includes high unemployment ratios, has resulted in millions of ordinary homeowners who find it nearly impossible or even impractical to maintain their properties during this widespread economic crisis. For many, unusually high mortgage payments have come to exceed their income limits, particularly with so many who are faced with job losses. In other cases, people find it impractical to continue paying after having refinanced a property and, thus, driven their principle balances to higher than what their homes are worth in a declining market.
As a result, properties are reverting to lenders who are now discovering that they are faced with high debt liabilities. To add to this dilemma, properties in some areas of the U.S. are still depreciating. Also, vacant properties, which are often vandalized, add to the liability issues that many lenders are now faced with. To counter this growing crisis and to unload multiple properties in a single transaction, banks are relying on investors who inquire about a single REO to, instead, buy several properties at a time for much less than they are worth on the retail market. This may seem to be a loss for banks, but remember that banks are only hoping to unburden the accounting liability that these properties represent.
The Investment Opportunity of a Lifetime
Because seasoned investors comprehend the wealth potential in purchasing tapes, the mere offering of bulk REO investments is a sexy investment opportunity. These investments create win-win situations for the investor, as well as for the lender. Wealthy investment corporations and individual investors are equally excited about the fresh opportunities to purchase bulk REOs and are clamoring to do so in record numbers. While the current market is still in a bit of a downturn for many Americans, those with decent credit and stable financial backing are discovering that bulk REO investing is one of the best money making opportunities of this age. Never has there been a time for this generation's real estate investors to make stronger profits than they are positioned to make now. The REO properties purchased in bulk today will eventually be sold on a retail market for sometimes 100% or more of their original investment price. Multiply this scenario by the number of foreclosed properties that investors are buying per tape and it's easy to see why real estate investors are overjoyed about this incredible investment opportunity.