I’ll make this quick, because I know you’re busy and so am I.

I have a well-known and highly regarded friend who runs a very successful New York hedge fund.  (He’s been interviewed by Investor’s Business Daily, Wall Street Journal, etc.)  Unlike many other hedge funds, this one is experiencing significant growth and great success due to a very unique business model which focuses around buying packages of REO properties.

(For the newbies among us, an “REO property” is one that is owned by a lender due to foreclosure.  And a “package” is a group of such properties sold as a single transaction.)

There are three incredibly unique things about my friend’s approach to this business:

1. He Pays (Liberally) Individual Real Estate Investors To Find These Packages For Him: He finds his packages of REO’s largely as a result of the effort of individual real estate investors who he has trained, and pays them very handsomely to bring these deals to him.  He then funds the good deals, pays the real estate investor who brought in the deal, and everybody makes a load of cash in the process.  (He does this because his firm focuses mostly on REO package deals in the $1Million to $50 Million range, and packages of this size are frequently most easily found at the local level.)
2. All Of His Trainees Are Given A Proof Of Funds For $2 Million (to begin with).  The value of this can’t be overstated.  Don’t you think that would completely change how you were perceived if you had a legitimate proof of funds for at least $2 Million?  You bet it would.  With that in your hand, your local lender is virtually forced to talk to you about REO packages they want to sell.
3. He Handles All Purchase Negotiations, Yet His Trainees Still Get Paid Very Well. Yes, you read that right:  He teaches investors how and where to find these REO packages, he then equips them to command the attention of the lenders who sell REO packages by providing a legitimate proof of funds, and finally, he handles all of the negotiations with the lenders who sell these packages.

His trainees then get paid an incredible (and frequently life-changing) amount of money for the service of assisting in finding these REO packages.

There’s more to tell you about this, but I only want to do so if there’s interest in it.  I’d like to bring my friend onto a special training call for you some time during the week of February 16 and 20, so please let me know if you’d like to know more about how to leverage large amounts of capital and get paid very well for finding REO package deals that would otherwise be completely out of reach for you.

Let me know if you’re interested by leaving a comment below.  Thanks for reading http://realestate.BryanEllis.com!

IMPORTANT UPDATE: Due to the ASTOUNDING RESPONSE (see below), we’re definitely offering this training.  To register (it’s free), click here:  Bulk REO Investor Training

Before I begin, allow me to reiterate that I’m fully aware this is a real estate blog and that many of the thousands of readers who visit these pages every day never, ever think about the stock market or the broader economy and its impact on your real estate investment profits.

But some events deserve special attention, and one of those happened today. Fannie Mae, the largest mortgage company in the United States, announced a loss in the second quarter of this year that was nearly three times larger than expected.

It’s a very common experience to hear about companies reporting their profits and losses each quarter. So why is this announcement different or more significant than most?

It’s all in the way the stock market reacts to it. Recall that earlier this week, I said that if the stock market was able to ignore a bad announcement from Fannie Mae, that is a solid sign that “smart money” (meaning mega money managers) think the worst is over for the credit crisis, and that the bad news has already been factored in to the stock market.

So what’s happening in the stock market? As of this moment at 10:38 AM, the Dow Jones Industrial Average is up by about 180 points, or 1.5%. That’s a pretty huge response. But the important thing to remember is that just about 3 weeks ago, this same stock market fell apart hard at the news of the potential impending collapse of Fannie Mae and Freddie Mac. So if the stock market closes today with anything other than a big sell-off, that’s a very positive sign.

Now that there is some hard data out about exactly what’s happening, there seems to be a collective acceptance that’s calmed the stock market.

By extension, the significance of the muted reaction to massive losses at Fannie Mae is that there’s one more bit of evidence that some people “in the know” think that the housing market downturn has run out of steam. And when one factors in the emergence of several Distressed Debt Funds, there is significant evidence of Wall Street’s expectations for a slowing (and possible reversal) of the real estate market doldrums.

Now that you know how Fannie & Freddie’s earnings results currently correlate to the perceived condition of the real estate market, I advise you to go out and find some good investment property to purchase. It won’t be long and you’ll be very glad you did so!

Thank you for reading FreeRealEstateTraining.com!

Teaser Video - Bryan Ellis on Fannie Mae’s Earnings Disappointment

What happens when a major lender wants to unload hundreds of millions - or even billions - of dollars worth of delinquent mortgages, even at a price lower than the amount of money they are actually owed?

When that type of transaction is done with individual properties, it’s called a short sale. When it’s done with billion-dollar portfolios containing thousands of separate mortgages, it becomes the mega-money version of a short sale called “distressed debt funds”…

…and the formation of new investment funds for purchasing distressed debt suggests that the worst of the credit crisis is behind us, particularly when those investment funds are backed by major money managers like PIMCO, BlackRock and Third Avenue Value Management. Here’s why this is such a good sign:

When any market (real estate, in this case) faces a sharp and severe decline, the financial players in that market go into “shock mode”. As an example, see what’s going on right now at Fannie Mae, Freddie Mac, Countrywide, etc. And when this happens, those types of companies tend to be willing to sell off their underperforming (delinquent) assets at lower than face value in exchange for an immediate end to the “bleeding”.

That’s where the big-time money management firms I mentioned before come into the picture. Like vultures, they are flying high above the scene and watching as the major mortgage lenders are bleeding uncontrollably and are increasingly willing to do ANYTHING to lessen the pain…

…and sometimes that includes actions like selling BILLION-DOLLAR mortgage portfolios for far less than the face value of the securities.

As a practical example, imagine that some mortgage company holds a billion dollars in mortgages, and most of them are in or approaching foreclosure. You come along and offer this company $500 million to take the portfolio off of their hands. This mortgage company isn’t happy to “lose” $500 million on this deal, but as far as they know, the value of their portfolio could decline even further and be even less than what you’re offering.

So they sell the portfolio to you. Why is this a good deal for you? It’s simple, really. The math favors you. You’ve been watching the market carnage and you’ve been able to evaluate things rationally - and that’s a luxury that the mortgage company you just “scalped” hasn’t had.

Why would you make such an investment in “bad” debt? The only reason you’d do so is that there is a LOT of evidence that the bloodletting in the market is at or near the end, and you’re willing to risk your own money on the notion that your mortgage portfolio that has a “face value” of one BILLION dollars and for which you paid $500,000,000 will soon be shown to be worth something between those two. And when that happens, you make money. And probably a whole lot of it.

That’s exactly what’s going on right now. Distressed Debt Funds tend to spring up in the aftermath of market downturns, and are a very good sign that insiders watch for to determine when “smart money” is re-entering a market.

What is one of the signs that a turn in the real estate market is happening? Here’s one: The National Association Of Realtors announced that pending home sales were significantly higher than expected in June. A very positive sign indeed.

The time is now. Don’t let this opportunity pass you by!

Thanks for reading FreeRealEstateTraining.com.