The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. Yet as always, challenge has given rise to a huge new opportunity for alert real estate investors. That opportunity is called Bulk REO investing, and the opportunity is huge.

Let's take a moment to analyze the basics of this incredibly lucrative business.

To understand investing in Bulk REO, you have to understand the foreclosure process. When a home owner begins to miss payments on their mortgage, the lender begins to send late/overdue notices to the home owner. After a certain period, the lender will then formally begin foreclosure proceedings. The name for this period is 'preforeclosure'.

To complete the foreclosure process, the property is auctioned to the public. If the property is not purchased at auction, ownership reverts to the original lender. This property is then considered to be 'Real Estate Owned' by the lender, also known as an 'REO property'

Typically, lenders list their REO properties with local real estate agents in hopes of selling the property to a retail buyer who will pay full price. But more and more, lenders are selling their REO properties for a greatly reduced price. The trade-off is that the buyer must purchase multiple REO properties in each transaction.

These REO packages represent the potential to acquire huge amounts of equity for savvy real estate investors. One of the best ways to take advantage of Bulk REO Investing opportunities is to partner with a well-regarded source of funding. Some sources of funding for these transactions are: personal funds, hard money lenders, commercial lenders and non-conventional sources such as private investors and hedge funds.

There's a lot more to say about Bulk REO Investing and I'll tell you more about it in the future. But for now, take this real estate investing technique very seriously. It won't last forever.