Buy Preforeclosures

Making money in foreclosures is possible. That’s the basic fact and you don't need a 10 page direct mail piece with hundreds of boring testimonials or some long online sales letter to tell you that.

So, what did it take for me? Well, I purchased a couple more real estate investing courses. One preforeclosure course was especially helpful, because it was written by a guy who had bought and sold over 200 preforeclosure properties and I also paid someone to mentor me. I can't give you the name because currently there is no available slots for more students. These two ways are quiet simple to do and can truly get you started.

Then it was simply a matter of taking action and I did. I didn't make as much as I would have liked on my first deal, but that didn't matter. I had that so crucial first deal under my belt and the rest have been a lot easier to do and a lot more profitable.

Well, if you were anything like me a year ago, you have bought some courses or maybe even gone to a seminar and started to learn real estate investing. You know "what to do", but short in confidence level in exactly "how to do it".

For example you've been taught to target buying foreclosure properties at 70% of "market value", right? But you haven't been taught (or not very well at least) how to go about convincing a homeowner that it's a good idea to sell at that price.

You have also been taught that the earlier you find foreclosures the better, right? But how do you find these preforeclosures? You have probably figured out it's not through a listing service :)

It is important to figure out exactly what you don't know and search for specific resources or mentors who can help you answer your questions at this point in your real estate investing career. Then after you have all your "ducks in a row" the only thing left is taking action, and nobody can teach you how to do that :)

Preforeclosure is basically the time period between the bank giving notice of default, when homeowners payments are around 90 days late and the time the house sells at auction. The key to preforeclosure investing is equity. Equity is the difference between what a house will sell for and what is owed on the house. Preforeclosures allow you to buy a house for less than fair market value, creating immediate equity for yourself. If you discover that the preforeclosure has been owned for many years, often with a small mortgage and a large equity, the homeowner might be extremely eager to sell at a bargain price rather than lose the house at the foreclosure auction. That’s where the money is.

You will get a better deal with preforclosures with conventional loans on. You can try to ask the foreclosure attorney for the name of the contact person at the bank so you can make a low offer on the REO, if the property was purchased using a conventional loan. Basically, you will be helping the homeowner by buying their property at less than market value, but more than their loan would cost to pay off. The danger for the homeowner is that when they default on a home loan, their credit is ruined and it may stay ruined for years. So, preforeclosure properties are a great source of profit for you and you'd be helping someone avoid ruining their credit and defaulting on a loan.

Remember that in many cases, the owner of a preforeclosure property is in need of help and with the right methods to sucessfully present a below-market-value offer to a homeowner, you can have them eager to accept it. It is this fact that many investors "take to the streets" and simply start knocking on the doors of people that are in preforeclosures and doors don’t get slammed in their faces. Be honest and sincere with the homeowners by pointing out how a preforeclosure will benefit both of you. Remember it's also important to provide support and help along the way until you successfully make the deal and beyond.

Preforclosures is profitable, but you can't make it unless you have the money to buy and refurbish a house. But where do you come up with all of the money you need? You might have a stash you're just waiting to invest, but most likely, you'll need to find investors. There are two different, easy ways you can fund your property deals without having to use a cent of your own money. Once you do find investors, it's important to establish solid relationships with them. Chances are, if you find a home you are able to resell quickly for full market value, the investors will like to work with you again. Buying foreclosures can be extremely profitable for both you and your investors

I personally was taught to forget most preforeclosure listing services and instead use methods to find foreclosures that have little or no competition from other investors. Another is the ads in newspapers.

Finding a preforslosure property in the earliest time possible is the best, because you have ample time to properly research the properties, since you can buy a preforeclosure property up until the day of the foreclosure auction. You should be able to capitalize on properties and earn excellent profits by learning the right techniques in finding preforclosure early, doing your homework, and with a little legwork.

Remember buying preforeclosure properties can be an incredibly lucrative business when done correctly. But as with any real estate investments, there are potential risks to flipping preforeclosures. So, it's important to educate yourself on state tax laws and all other legal facets of the business, and as much as possible get a mentor with experience before jumping in.