With more foreclosures now than ever before, America's weak real estate market seems to set new dismal records each month. Yet as always, this challenge has given rise to a huge new opportunity for alert real estate investors.

The real estate investing strategy du jour is called 'Bulk REO Investing' and is a real monster.

The basis of the Bulk REO business is foreclosures, so let's analyze the foreclosure process now.

Understanding of the foreclosure process is central to understanding Bulk REO investing.

A home owner who misses one or more mortgage payments is faced with an ever-increasing volume of threatening correspondence from their lender. The lender directs the subsequent timing of the actual foreclosure proceedings. The 'pre-foreclosure' time starts with filing of foreclosure paperwork and concludes at public auction.

Foreclosure is completed when the property is put up for auction. If there are no buyers for the property at auction, the property is returned to the lender. The lender then categorizes the property as 'Real Estate Owned' - or 'REO' for short.

Lenders usually try to unload their REO properties at close to retail price by listing their REO's with a real estate broker. However, REO properties are now frequently sold for far less than their 'book value'. However, the purchase of a 'package' (or group) or REO properties is the trade-off for receiving such great prices.

The REO investment packages available today have provided a way to profitably capitalize on the U.S. recession. Bulk REO Investors are most successful when they have a well-established source of funding for their REO packages. 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 Salvatore Bushemi of Dandrew Partners, a hedge fund in New York.