Foreclosure Or Pre- Foreclosure

Category: Finance, Real Estate.

Professional real estate investors know that buying foreclosure real estate can be difficult, frustrating and at best a complete waste of time. But for the experienced investor, foreclosure real estate really can be a satisfying source of good income- and a golden opportunity for first time home buyers.

That is, it can be all of those things to an unwary new investor straight from a" Make Big Money In Foreclosure Real Estate" seminar. The Right Type Of Buyer. But they should. Most home buyers looking for a personal residence do not even consider foreclosure property because of the imagined problems. It is puzzling in a way. They then turn around and sell it to upgrade to a more expensive fixer and start the process all over again.

There are many people starting out with little money or credit who buy a" fixer" and spend much time and money fixing it up while they are living in it. If this describes you, you should really consider a foreclosure property. Let s start with the basics. But you need to study this a little first so you don t suffer the pain and disappointment common to so many attempting this route. Foreclosure or Pre- foreclosure. You do not want to do this.

The term" foreclosure" makes most people think of a scene in which a home is auctioned off on the court house steps and you bid against other interested investors. It is virtually impossible to get the edge on the experienced bidders who have done this many times. A pre- foreclosure property is one on which the lender has begun foreclosure because the owner failed to make several mortgage payments but it has not yet reached the auction sale stage. What you need is a" pre- foreclosure" property. A key to successful pre- foreclosure investing is to build trust with the homeowner so that you can gather the information you need and move quickly to put together a deal that everyone will agree to. Done right, buying a pre- foreclosure property can be a good experience even for a first time home buyer. Pre- foreclosure Properties Can Be Profitable.

You have ample time to research them because you can buy it up until the day of the foreclosure auction. You should keep this in mind. When you buy a pre- foreclosure, you help save the home owner s credit by avoiding a foreclosure auction. You are not taking advantage of the homeowner in distress. Pre- foreclosure investing makes everyone involved a winner. You are helping him/ her to avoid a current and many future credit related problems.

Lenders typically don t bother explaining borrowers rights and options. You have the opportunity to help homeowners avoid foreclosure, salvage their credit rating, and get on with their lives. They simply want to collect their money. And you can gain a home of your own- or resell it and make money by doing it. It can be your opportunity to buy low and sell high, quickly maximizing your equity. You can end up saving tens of thousands of dollars on the purchase of your home by buying a pre- foreclosure property. Repairs Will Be Needed.

Many of the best opportunities you find will need a lot of tender loving care to get them ready for resale. It is not all gravy. They may need carpeting, up- dated or repaired appliances, electrical or plumbing. All of them will certainly need painting and some landscaping work. Roofs may need to be repaired. If a person is short of money and facing foreclosure, these things simply do not get any attention. Buying a pre- foreclosure property can benefit both yourself and the current home owner.

Summary. It is not always easy but it can be very rewarding. Don t rush or get discouraged. Unless you are a well qualified handyman yourself, you should get an estimate from qualified professionals on what it would take to bring the home up to standard. Buying a pre- foreclosure home gives you plenty of time to make unrushed decisions.

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