Foreclosures For Profit | Part One

Foreclosures For Profit | Part OneForeclosure investing is likely one of the fastest growing areas in real estate business today. It is popular with investors because with a quick search of real estate comps, you reap the benefits of the better return potential that it offers. It works for all kinds of homebuyers, both first-time investors and seasoned experts. With a little know how it is not difficult to make a significant profit.

Investing in foreclosure properties is probably the cheapest way of maximizing your investment returns in real estate. Investing in foreclosures for sale is the number one way to ensure a great value on your investment because investing is all about staying ahead of the competition and making healthy profits.

They are generally auctioned off at an under market value which provides an opportunity for the real estate investor to clean up and quickly flip the home for a profit.  Take advantage of the opportunity to grow your business and portfolio by taking a look at what foreclosures can do for you.

When To Invest In A Foreclosure | Part Three

When To Invest In A Foreclosure | Part ThreeReal estate comps are a source of pertinent real estate information, especially for an investor.  I want you to walk away with some things to ponder regarding foreclosure investment choices.  My goal is to prompt you to do your own research and find out what works for you and your business.  Let’s take a look at our last type of foreclosure deal, the bank owned property, or REO.

An REO is the simplest way to purchase property. It is a good investment for the first-time homebuyers and investors. A bank owned property allows you to gain access to the property for an inspection. Lenders have a responsibility to their shareholders and they lose money on non-producing assets. So, they want a quick sale. They are able to provide 20% to 30% savings. All liens and back taxes removed. They are able to negotiate on rehab costs, interest, closing points, and loan amounts. They may allow a less than normal down payment. If there are tenants, the lender will evict them. Basically, 100% risk free.

There are pros and cons to all options. You have to make a choice on what works for you.  It may be one type of foreclosure or all of them. However, the safest way is for you to do your homework. Know the property inside and out. Research everything about the property. Then, when you have done your due-diligence, you can make an educated decision and make your profit when you buy.

When To Invest In A Foreclosure | Part Two

When To Invest In A Foreclosure | Part TwoToday, I want to discuss the second phase of a foreclosure and what it entails.  The real estate comps are always a guide, and will lead you to the most profitable choice.  Today we will be talking about the foreclosure auction.

After the property goes into foreclosure, it then goes to auction. In order to purchase a home at a foreclosure auction, you need to make a minimum bid, pay off loan balance, all accrued debt, attorney’s fees, and you are responsible for all costs. If there is a tenant in the property, you are responsible to evict them. You are responsible for all repairs. There are no inspections; you are buying the house “as is.”

If the house does not sell in the auction, it goes back to the bank. The lender now has the right to sell the property as an REO (real estate owned), this is the third and final phase of a foreclosure. What exactly is a REO? I’m glad you asked.  In my next post we are going to talk about REO’s and why you may prefer them over any of the other phases.

When To Invest In A Foreclosure | Part One

When To Invest In A ForeclosureThere are three phases of a foreclosure: pre-foreclosure/short sale, auction, and REO (real estate owned). Each phase can be seen in real estate comps for any given area. Today I want to talk with you about the phases of a foreclosure and when, during the process, is the best time to make your foreclosure investment.

Pre-foreclosure is the first phase. This means that payments are behind at least 90 days. During this first 90 days, only the homeowner and lender know about the proceedings. After 90 days, a notice of default or Lis Pendens is recorded at the county recorder’s office or register of deeds office. Now is a good time to purchase the property. The property is still in the owner’s hands and they may be willing to work with you. First, you need to find them, contact them, ask questions, and do your homework. If the deal is profitable, then offer assistance.

The homeowner still is in control. If there is equity in the property, work with the owner to take an equity position. If there is no equity, work with the lender. Always try to negotiate with the lender to buy the property for less than what is owed (short sale). This can help the homeowner avoid foreclosure and possibly help them avoid any more damage done to their credit. Bank gets rid of a bad loan and you make a profit on the resale. Win-win for everyone.  This is a perfect scenario.

My next post will continue to cover the phases of foreclosure.  It is important that you know what you are dealing with.  Learning the pros and cons of each could save you a considerable amount of money in the long run.

Finding Success in Real Estate Investing | Part Three

Finding Success in Real Estate Investing | Part Two

The past few days we have discussed the real estate market and how to leave your mark on it.

Remember guys, staying focused is critical. Which area interests you the most – and why? Which type matches your personality, abilities and skills? Your choice should “fit” you and, most important, it must have the potential of helping you reach your financial goals.

If you are a do-it-yourself person with a creative flair and would enjoy being involved in the day-to-day oversight of properties, single family fixer-uppers would be a good possibility. On the other hand, if you have no interest in managing the properties, apartment buildings make more sense because apartment buildings generally have on-site managers that take care of everything.

Once you have decided which type of real estate will be your focus, study that market carefully – in great detail – before making an offer. Gather as much pertinent information as possible, for example, fair market value of the property, recent sales in the area for similar properties (real estate comps), the maximum offer you are prepared to make, and have a valid estimate of expected rental income and immediate costs (renovations, repairs, etc.).

Be prepared for anything that may come up in the bargaining sessions. Make sure you are working with an experienced agent that you can trust. It is always best if the agent has been referred to you by an experienced investor. You may also want to discuss any potential purchase with other trusted advisors such as your financial planner, your attorney and your accountant.

It should go without saying that the goal of a successful real estate investor is always to get the best property for the best price. Once you learn the system, and you have closed escrow on your first property, you will be on your way.