By now of course you know foreclosures are at an all-time
high in our country. Nevertheless it is another Real Estate
Investing niche that has given many people great potential
for making money.
One of the most important things to remember about
foreclosure investing is that there are many details to
consider. It is not difficult, per se, and once you become
familiar with all of the small details you can achieve
success in no time at all.
The first thing you need to know about foreclosure
investing is how it works.
Basically, a foreclosure is a property that the bank owns
due to the fact that the owner of the property neglected to
follow the terms and conditions of his/her mortgage, which
usually means a failure pay his or her mortgage. In turn,
the bank that owns these properties is forced to sell them
back to the public in order to recover the money that they
lost.
And to go along with this, the bank often attempts to sell
foreclosures quickly because they are not making any money
by holding onto them. All of this works out to the
advantage of a foreclosure investor.
Because homeowners have heard or read about the profit
potential, most people facing foreclosure will usually try
every option available before selling to a Real Estate
Investor. Let's face it, they know that as Real Estate
Investors we are only going to offer a certain percentage
of what the property is worth on the open market, but look
at the alternative.
The home will be auctioned off. The homeowner will get
nothing in terms of money, will lose all of their equity in
the house, and have a foreclosure on their credit report.
This will probably prevent the homeowner from being able to
qualify for another loan for several years.
Depending on the situation the Real Estate Investor, in
exchange for control of the property may offer the
homeowner a cash payment, make up the missed mortgage
payments, and pay all of the penalties and legal costs that
have accumulated. In essence the property is brought to a
current status and the foreclosure process is effectively
stopped.
Real Estate Investors have really helped homeowners in this
situation whether they realize and appreciate it or not.
So our job is to find homeowners who are facing foreclosure
and either pass on or work the lead to see if we can buy
the property. The main thing that makes the foreclosure
process very complicated is that it varies from state to
state.
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Chris Parks is a Real Estate Investor who has been involved
in Real Estate in one capacity or another since the mid
1980s. As a member of a small group of Real Estate
Investors & Entrepreneurs, and always having the knack for
explaining Real Estate Basics in an easy to understand
manner, Chris created REI for Newbies in order to teach &
assist new Real Estate Investors in a step-by-step,
easy-to-understand manner. http://www.REIforNewbies.com
