Real Estate Owned or REO are properties owned by lenders, mostly the banks or mortgage companies. Bulk REO investing refer to buying bulk foreclosed properties. It;s important to know the foreclosure market in order to understand why it’s such a lucrative investment opportunity.

Given the current economy, several new investors discovered that they can get properties for less than the current market value and realize the profit they can get from reselling them. They had held opportunities to increase their profits through distressed properties.

Before you make an offer on an REO property make sure you do your homework on the property. Keep one important thing in mind; banks are not property management companies and they WANT to sell this property. Often, if they do not receive an offer at a listed price they will be willing to drop their price in order to make the sale.

There is tremendous incremental cost for a bank to continue to manage a property and they would much rather negotiate a fair price and take a small loss than be responsible of long term upkeep and administrative costs of holding the property. At the same time, don’t expect the bank to ‘dump’ the property for an outrageously low sum. That rarely if ever happens.

Purchasing REo properties entails a lengthy process and lots of paperwork. In this regard, hiring an experienced Real Estate Agent or REO Specialist would definitely help you along the way. Inability to provide all the needed documents can break your chance of getting a profitable investment opportunity.

As bulk REO offerings become more common, investors are discovering a once in a lifetime opportunity to seize an opportunity to create enormous real estate wealth. Where the original homeowner unfortunately loses their home, confident investors have been able use a unique market to their maximum advantage.

Keep an eye out for these situations, especially now, but know what you’re getting into with each property. Work your network for essential market information and buyer leads, and keep your wits about you at all times. There’s a lot of money to be made in distressed properties, but getting a share of it requires hard work, market savvy, and sometimes a bit of luck.