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PROFIT IN FORECLOSURES
THE UNITED STATES FORECLOSURE REPORT
FIND OUT HOW YOU CAN MAKE MONEY IN FORECLOSURES
FORECLOSURE INFORMATION
On this page you'll find information that will provide helpful information in buying foreclosures as an investment, for your new home or to help someone in foreclosure. This article is just an overview and you'll want to get more foreclosure information by going to the index page on this website and requesting the 3 part article that covers the whole foreclosure spectrum. If you are going to be doing anything at all with foreclosures, short sales or any type of distressed property, the advertisers on this page will prove invaluable, especially if you have a limited amount of time to devote to working with foreclosures, because they can save you a lot of time.. The first 3 advertisers all have a free 7 day trial periods. My advice is to take each one of them up on their free offer and then you can make a comparative analysis of which one you like the best. Even if you decide you aren't going to subscribe at least you'll have good idea of what foreclosure listings are all about.
The 4th ad is a very good book on doing foreclosure short sales that will be a huge help in your investing, especially if you're new at it. Be sure to check them all out, as to exactly how they can help you.
FORECLOSURE INVESTING
AN OVERVIEW OF THE RISKS & REWARDS
Foreclosure investing can be divided into 3 general categories, which are pre-foreclosure, auction and REO. There is a sub-category in the pre-foreclosure one that is important enough to almost call it a separate category. This is the short sale period and many times begins before the legal pre-foreclosure starts. An important point to the foreclosure investor is whether the lending instrument is a Deed of Trust or a Mortgage. I'm not going to explain the differences here, but will be using the term mortgage as the catchall loan instrument. The short sale is quickly becoming a huge part of the foreclosure investment picture because most of the foreclosures have mortgages that are higher than the property is worth.
SHORT SALE
The scenario of a short sale is normally as follows: An investor finds a borrower who is in foreclosure or getting real close. If the investor can justify making an offer that he thinks the lender will accept, one that will make him a profit and something that will help the owner, then he goes forward. The steps that go into this process are in the pre-foreclosure section next. I've found that the more repairs a property needs the easier it is to deal with the lender, as they usually want to get rid of the problem property as quickly as possible.
Pros: If you're a good negotiator and have a good plan for the property this is a good way to invest as normally there is not a lot of competition. In some cases you can get a price up to 50% under market although usually it 25% to 35%.
Cons: Most lenders are hard to deal with due to being swamped with foreclosures, wanna-be investors wasting their time and the employees not having the experience to realize we're actually helping them.
PRE-FORECLOSURE
In pre-foreclosure we'll assume the borrower has missed enough payments that the lender has filed a notice of default and recorded it. Sometimes this recording is online and an investor can get enough information on the property to start working with the homeowner and the lender. If you aren’t able to get enough information, be sure to check out the advertisers on this page as that is their business and they’ll have as much info on the properties as is available.
The normal progression to make a purchase (other than a short sale) in pre-foreclosure is the following:
1. Locate a property in default and preferably needing some work.
2. Do your homework and only pursue properties that have the potential for a profit.
3. Have an exit plan for the property in place before you do a lot of work.
4. Inspect the property thoroughly.
5. Determine the market value, fix-up costs, potential sales price and profits.
6. Make sure that what works for you will also take care of the owner's needs.
7. Make sure all work out items are negotiated with both owner and lender.
8. Close on the property, repair and resell it quickly.
Pros: Along with a short sale this is also a good investing opportunity when done correctly. Discounts from market value can range from 25% to 35% on average. A low cash down payment may be possible. You have plenty of time to research properties. There are some opportunities for unique, creative and flexible sales agreements. Show the owner how to solve his problem and he'll help you make a profit.
Cons: It is often difficult to contact the property owner and to get him to listen to you. By this stage there will usually be a lot of competition. Negotiations can take forever. You have to make sure there are no hidden problems. Buy title insurance, it's pricey but absolutely a must to keep from getting burned. .
BUYING AT THE COURTHOUSE AUCTION
Buying at the auction can be the best way to buy properties and the worst. Best because you get a clean title where all junior lien have been wiped out. The worst way is because you don't really get a chance to inspect the property unless it was listed. In today’s market there aren't a lot of bargains unless the lender decides to bid less than his loan. The property is publicly auctioned off to the highest bidder, and the process moves very quickly. When bidding at the auction, you compete against the lender and other investors.
Auction buyers:
1. Research properties as best you can prior to the sale date.
2. Only go after real opportunities with plenty of profit in case you miss a cost.
3. Determine value and potential profit to determine maximum bid price
4. Go to auction and bid with confidence that you've done your homework.
Pros: Possible good to excellent discounts. Investors can ofter buy from 25% to 45% under market value and earn an excellent return on investment. This is an investing method where you could hit the jackpot.
Cons: Auctions are often postponed, wasting your time and effort. You normally don't get to inspect the property. You should always have a title search performed, which can be costly. You need a lot of money to play in this game or have your loan already in place which is hard to do with regular lenders. Certified checks for 10% of the purchase amount may be required with the balance due in weeks, days or even hours. Improper research can lead to disaster.
BUYING REAL ESTATE OWNED (REO) PROPERTIES
Perhaps the easiest and safest way to buy foreclosed property is buying REOs ("real estate owned"). The problem with this method is that your profits will be less than with the others. An REO occurs when the lender takes back the property to gain possession and cut its losses. The lender, however, does not want the property because it is not in the real estate business and is therefore usually motivated to move the property quickly. They often list them with a Realtor giving you another layer of ease and safety.
Pros: The lender is almost always the senior lien holder and has wiped out all other liens at the auction. You'll get a clear title with no back payments, taxes, HOA dues etc. This will save a lot of time, expense and worries when buying foreclosures. The lender may have done the repairs so that you get a move in ready property, but you'll make a better deal if no repair have been done.
Cons: Rewards follow risk. This is a low risk investing method and the rewards can be on the low side as well. Most lenders list their REOs with Realtors so the savings may range from only 5% to 20% under market value.
Investing in foreclosures can provide excellent profits. Each of the three foreclosure opportunities presents both rewards and certain risks. Be sure to do your homework before you buy. Go to the home page of this website to get a more comprehensive study of foreclosure investments.
The 4th ad is a very good book on doing foreclosure short sales that will be a huge help in your investing, especially if you're new at it. Be sure to check them all out, as to exactly how they can help you.
FORECLOSURE INVESTING
AN OVERVIEW OF THE RISKS & REWARDS
Foreclosure investing can be divided into 3 general categories, which are pre-foreclosure, auction and REO. There is a sub-category in the pre-foreclosure one that is important enough to almost call it a separate category. This is the short sale period and many times begins before the legal pre-foreclosure starts. An important point to the foreclosure investor is whether the lending instrument is a Deed of Trust or a Mortgage. I'm not going to explain the differences here, but will be using the term mortgage as the catchall loan instrument. The short sale is quickly becoming a huge part of the foreclosure investment picture because most of the foreclosures have mortgages that are higher than the property is worth.
SHORT SALE
The scenario of a short sale is normally as follows: An investor finds a borrower who is in foreclosure or getting real close. If the investor can justify making an offer that he thinks the lender will accept, one that will make him a profit and something that will help the owner, then he goes forward. The steps that go into this process are in the pre-foreclosure section next. I've found that the more repairs a property needs the easier it is to deal with the lender, as they usually want to get rid of the problem property as quickly as possible.
Pros: If you're a good negotiator and have a good plan for the property this is a good way to invest as normally there is not a lot of competition. In some cases you can get a price up to 50% under market although usually it 25% to 35%.
Cons: Most lenders are hard to deal with due to being swamped with foreclosures, wanna-be investors wasting their time and the employees not having the experience to realize we're actually helping them.
PRE-FORECLOSURE
In pre-foreclosure we'll assume the borrower has missed enough payments that the lender has filed a notice of default and recorded it. Sometimes this recording is online and an investor can get enough information on the property to start working with the homeowner and the lender. If you aren’t able to get enough information, be sure to check out the advertisers on this page as that is their business and they’ll have as much info on the properties as is available.
The normal progression to make a purchase (other than a short sale) in pre-foreclosure is the following:
1. Locate a property in default and preferably needing some work.
2. Do your homework and only pursue properties that have the potential for a profit.
3. Have an exit plan for the property in place before you do a lot of work.
4. Inspect the property thoroughly.
5. Determine the market value, fix-up costs, potential sales price and profits.
6. Make sure that what works for you will also take care of the owner's needs.
7. Make sure all work out items are negotiated with both owner and lender.
8. Close on the property, repair and resell it quickly.
Pros: Along with a short sale this is also a good investing opportunity when done correctly. Discounts from market value can range from 25% to 35% on average. A low cash down payment may be possible. You have plenty of time to research properties. There are some opportunities for unique, creative and flexible sales agreements. Show the owner how to solve his problem and he'll help you make a profit.
Cons: It is often difficult to contact the property owner and to get him to listen to you. By this stage there will usually be a lot of competition. Negotiations can take forever. You have to make sure there are no hidden problems. Buy title insurance, it's pricey but absolutely a must to keep from getting burned. .
BUYING AT THE COURTHOUSE AUCTION
Buying at the auction can be the best way to buy properties and the worst. Best because you get a clean title where all junior lien have been wiped out. The worst way is because you don't really get a chance to inspect the property unless it was listed. In today’s market there aren't a lot of bargains unless the lender decides to bid less than his loan. The property is publicly auctioned off to the highest bidder, and the process moves very quickly. When bidding at the auction, you compete against the lender and other investors.
Auction buyers:
1. Research properties as best you can prior to the sale date.
2. Only go after real opportunities with plenty of profit in case you miss a cost.
3. Determine value and potential profit to determine maximum bid price
4. Go to auction and bid with confidence that you've done your homework.
Pros: Possible good to excellent discounts. Investors can ofter buy from 25% to 45% under market value and earn an excellent return on investment. This is an investing method where you could hit the jackpot.
Cons: Auctions are often postponed, wasting your time and effort. You normally don't get to inspect the property. You should always have a title search performed, which can be costly. You need a lot of money to play in this game or have your loan already in place which is hard to do with regular lenders. Certified checks for 10% of the purchase amount may be required with the balance due in weeks, days or even hours. Improper research can lead to disaster.
BUYING REAL ESTATE OWNED (REO) PROPERTIES
Perhaps the easiest and safest way to buy foreclosed property is buying REOs ("real estate owned"). The problem with this method is that your profits will be less than with the others. An REO occurs when the lender takes back the property to gain possession and cut its losses. The lender, however, does not want the property because it is not in the real estate business and is therefore usually motivated to move the property quickly. They often list them with a Realtor giving you another layer of ease and safety.
Pros: The lender is almost always the senior lien holder and has wiped out all other liens at the auction. You'll get a clear title with no back payments, taxes, HOA dues etc. This will save a lot of time, expense and worries when buying foreclosures. The lender may have done the repairs so that you get a move in ready property, but you'll make a better deal if no repair have been done.
Cons: Rewards follow risk. This is a low risk investing method and the rewards can be on the low side as well. Most lenders list their REOs with Realtors so the savings may range from only 5% to 20% under market value.
Investing in foreclosures can provide excellent profits. Each of the three foreclosure opportunities presents both rewards and certain risks. Be sure to do your homework before you buy. Go to the home page of this website to get a more comprehensive study of foreclosure investments.
What's Today's Best Investment?
It's Not Stocks! It's REAL ESTATE!!
Create Wealth Buying FORECLOSURE Properties!
Search the Nations largest database to see what opportunities are waiting for YOU!
It's Not Stocks! It's REAL ESTATE!!
Create Wealth Buying FORECLOSURE Properties!
Search the Nations largest database to see what opportunities are waiting for YOU!
These ads are brought to you by Foreclosure.com.
With over 1.2 million property listing updated daily, Foreclosure.com represents the largest and most up-to-date bargain home buying opportunity online. Click on either ad to go to their listing search page.
With over 1.2 million property listing updated daily, Foreclosure.com represents the largest and most up-to-date bargain home buying opportunity online. Click on either ad to go to their listing search page.
RealtyTrac publishes nearly 1 Million properties from nearly 2,500 counties nationwide, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal. Click either ad above to go to RealtyTrac's listing search page.
RealtyStore.com is the #1 provider of Foreclosure information in the nation.We have the premier database of foreclosure properties, which sell for much less than "ordinary" homes (up to 50% less according to industry reports).
Click on the ad to the left to go to RealtyStore's listing search page.
Click on the ad to the left to go to RealtyStore's listing search page.
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