Let’s talk bulk foreclosure tips for a second.
I wanted to talk about them, because I used to think they were some mystical real estate phenomena that I had heard about, but never dealt with personally.
Related: How to Flip a Home and Save Money
By the end of this short talk, you might find that the barrier for getting involved with them may not be as large as you thought.
If you know what you’re doing with bulk packages, they’re a pretty smart way to build wealth in the single-family real estate game.
Besides, if Warren Buffett said he was interested in bulk-buy SFR’s, it’s probably something that’s worth looking-into, would you agree?
Before I get into the tips, let’s talk about a few of the benefits of the bulk REO game:
Benefits of Bulk Foreclosures
Let’s talk about some not so obvious benefits of working with bulk foreclosure packages.
Less Competition/Bigger Profits
Newsflash! You can make more profits with bulk packages than you can if you buy properties one at a time!
OK, while I’ll admit that it’s kind of a no-brainer that you can make more money off of bulk packages, I’ll share something else you probably never realized…
There’s less competition for bulk foreclosure packages than there is when you’re trying to buy them one-at-a-time.
OK, maybe that isn’t ground-breaking news, either.
But you might get more excited about that, when you find out that it’s not as hard to get into the bulk foreclosure game as you may have thought.
When you’re trying to acquire properties, you want as little competition as possible. The less competition you have, the less you’re probably going to have to pay.
Dealing with Posers
You will spend a LOT of time filtering through people to figure out who’s really a buyer and who’s really a seller in the bulk business.
If you thought there were a lot of posers in the one’sy/two’sy game of dealing with properties, just wait ’till you start dealing with bulk tapes.
They Aren’t As Risky as People Think
I’ll get more in-depth in a bit, but for now, just know that there are ways to make money with these with little-to-no financial risk.
Part of the reason why there’s such little competition with these bulk packages, is the intimidation factor.
At least for me, that was the case. I always thought they were super risky.
In my mind, just ONE house was risky enough; I couldn’t even FATHOM the risk involved with buying 50 or 100 properties at once.
On top of that, imagine buying all those houses without even getting to see them, let-alone the insides of them.
Due Diligence
I quickly found out that my fears weren’t justified, when I realized that you get a due diligence period on bulk deals, just like when you buy properties one-by-one.
Once you get a tape under contract, you will have a due diligence period where you can review the properties,
During this period, you can check them out. You can even remove the ones you don’t want.
The amount of time you’ll get for due diligence varies, depending on what both parties agree on (and the size of the tape), but you usually get about 7-to-10 days.
They Have Commercial Packages Too
If you’re just getting familiar with bulk properties, you’re probably not going to deal with commercial packages yet, but I just wanted to let you know about this.
Back in the day, I used to only think about single-family houses when I thought about bulk packages.
But they have commercial packages as well. Each “commercial” property in a package has five units or more.
And they have more than just multi-unit residential properties in tapes. They also have shopping centers, retail buildings, and performing and non-performing mortgage notes available in bulk packages, as well.
OK, now on to some tips…