Tens of billions of dollars are now up for grabs for real estate investors seeking to buy distressed REOs.
Are you missing out?
Conditions are getting even better for acquiring distressed REO for flipping or holding for cash flow. In fact, it’s about to become an all-you-can-eat buffet for hungry investors ready to exceed their goals.
The available pool of distressed REO may have been depleted recently, but the largest competitors are now moving to help the smaller and mid-range investor, as more funding becomes available and deal flow increases.
Thankfully, two factors are changing the game in favor of the investor, making for dramatically increased deal flow for those that want it.
What’s New in REO and Non-Performing Loans?
Coming down the pipe are tens of billions of dollars in delinquent mortgage loans that are steamrolling their way to becoming bank-owned REOs. This new pool of fresh investment property deals is like the Atlantic Ocean versus a kiddie pool, when compared with the publicly-marketed REO on the market right now. It’s also being complemented nicely by rapidly rising U.S. property prices and stable end demand.
However, the direct competition over the most attractive, below-market deals is dwindling, especially for those taking down distressed debt early by buying non-performing loans from banks, but including bank-held REOs – much to the delight of investors.
If you missed the latest headlines, this is because the largest hedge funds and private equity firms like Blackstone, Cerberus, and Colony are backing off the REO-to-rent game and are instead dedicating their billions in cash for loans to smaller investors as working capital.
Even better, they are reportedly loaning it on more attractive terms than conventional mortgage channels. This cash is up for grabs for buying distressed REO in bulk, with minimum loan amounts ranging from $2 million to $5 million or more. However, what’s really nice is that these loans can be split between different properties for easier resale.
So go big, keep what you want, flip what you don’t. Find your next acquisition with BankProspector.