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Archive for November 29th, 2009

With more foreclosures now than ever before, America’s weak real estate market seems to set new dismal records each month. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.

This new opportunity – known as ‘Bulk REO Investing’ – is so huge it’s captured attention from wealthy investors and private investment funds alike.

Foreclosures are at the heart of the Bulk REO business, so let’s consider the foreclosure process.

To understand investing in Bulk REO, you have to understand the foreclosure process.

Mortgage lenders faced with a non-paying home owner send a large volume of threats, warnings and documentation to the borrower who is late. After a certain period, the lender will then formally begin foreclosure proceedings. The ‘pre-foreclosure’ time starts with filing of foreclosure paperwork and concludes at public auction.

To complete the foreclosure process, the property is auction 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.

REO properties are usually listed for sale with local real estate agents. However, REO properties are now frequently sold for far less than their ‘book value’. Lenders are willing to do so in exchange for the buyer’s agreement to purchase a ‘package’ of REO’s rather than a single property.

There is huge profit potential in these REO packages for qualified real estate investors. REO packages are easiest to buy and sell with a well regarded source of financing in place. 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. Additionally, one man is becoming very well known in the field of bulk REO investing, and his name is Sal Buscemi of Dandrew Partners, a hedge fund in New York.

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Private medical coverage offers reimbursement for health care. Prescription assistance programs may be included in some programs. Certain policies may possibly provide for payment of medical expenses incurred on a reimbursement basis by paying benefits to the plan holder, payment on a service basis by paying those who supply the services directly, or payment of an indemnity by paying a established amount regardless of the sum charged for medical bills. Health expense or hospitalization insurance may well be written on an individual or group basis. Many of these policies will provide prescription help.

Even though there are a lot of types of benefits offered, private health expense coverage can normally be categorized as basic health expense insurance, major medical insurance, comprehensive medical insurance, and special programs. These Programs ought to cover prescriptions because prescription drugs help so many people. A large amount of these plans have largely been replaced by managed care alternatives and are no longer available as stand-alone policies. These types of programs have been adapted and replaced in answer to changes in the health care field relative to cost control and market competition.

Basic health insurance provided by a individual health expense plan includes hospital expense, surgical expense and medical expense. These 3 basics may be sold as one or individually. Often this is issued as “first dollar” insurance, which means it does not contain a deductible.

As the name implies, hospital expense coverage offers benefits for charges incurred throughout hospitalization. Hospital indemnities are mostly classified into two broad categories:

• Room and board, with nursing care and special diets

• Miscellaneous health expenses, including x-rays, laboratory fees, prescription medication, medical supplies, and operating and treatment rooms

In some cases, surgical benefits may well be built-in for a number of types of surgery and associated costs. Hospital expense medical insurance offers benefits for daily hospital room and board and assorted hospital bills while the insured patient is confined to the hospital. The plan can provide for a particular dollar amount for the daily hospital room and board benefit, although the trend is toward medical insurance of not more than the semiprivate room rate unless a private room is medically necessary. The room and board benefit may be paid on either an indemnity basis or a reimbursement basis, depending on the particular plan.

Indemnity programs are every so often called dollar amount plans. Room and board rates vary by geographic location, however it is not unusual to find room and board rates ranging from $150  to $800  per day or more.

By and large, the maximum number of days is from 90  to 450 . More commonly, room and board charges are paid on a reimbursement basis. This is {frequently called an expenses incurred basis~This is also known as a expenses incurred basis~This is often times called a expenses incurred basis}. Under this plan, the policy will pay in one of two methods.

• The actual charges for a semiprivate room are covered.

• A percentage of the actual expense is paid, with no definite dollar limit.

Under the first reimbursement option, the health insurance company will pay the full actual semiprivate room rate, regardless of what it is. Under the second reimbursement option, the healthcare insurance company pays a specific percentage, regardless of what the actual charges are. A normal percentage is 80%.

To recap, under the actual charges kind of reimbursement policy, the plan will pay the actual amount billed for a semiprivate room with no regard to a specific dollar limit. With the percentage style of reimbursement health insurance, the policy might pay a specified percentage of the actual bill.

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