Real Estate Foreclosures
In recent years, there has been much hype surrounding real estate foreclosures. On one end of the spectrum, you have people who claim you can become a millionaire virtually overnight by buying properties for "pennies on the dollar." On the other end, you have people who claim that because of all the competition, it is virtually impossible to make any real money with real estate foreclosures. The truth is somewhere in the between.
In general, there are 3 stages of real estate foreclosures where you can make money:
1) Pre-foreclosure: This is where the owner has defaulted on the loan but the foreclosure process has not yet officially begun. By going to the local courthouse, you can find out who in your area has defaulted. Some investors contact these people directly, and work out deals with the owners, often purchasing the homes at a discount in return for bailing the owner out of their debt.
2) Auction: These are homes that have been foreclosed on, and are sold by banks and government organizations. In most cases, buying at an auction is a bit of a gamble, since you will not have a chance to inspect the home. The homes are also sold "as is" and you may get stuck with hefty repair costs. Competition at auctions can be quite high, so you probably won't get as good a deal as you may think. Also, you will need to put 10 - 20 % down on the spot if you win the auction.
3) REO: When a home does not sell at an auction, it becomes an "REO" and goes back to the bank, or government organization like HUD of Freddie Mac. You can find these deals on websites like Foreclosure.com or by contacting these organizations directly. Real estate foreclosures in this category sometimes sell for close to market value, but if you know where to look, you can often get discounts of 10 - 20% off the market price.
There is money to be made at each of these stages, but I would recommend beginners to specialize in only one stage. If you want to get into this game you should understand that you are running a business, and like all businesses it will require a lot of time and dedication if you want to be successful.
Here are additional resources if you are serious about investing in real estate foreclosures:
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This is an excellent real estate foreclosure course by a real-life foreclosure expert who reveals the tricks and secret formulas he uses to make massive profits in the foreclosure industry. I like this course because it actually provides a step-by-step formula for success that takes out the guesswork. It is also relatively inexpensive (considering that some real estate seminars charge $3000 or more).
>> Find out more about this course |
| Foreclosure.com - Largest Listing of Foreclosures! |
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America's largest real estate foreclosure database with over a million listings, Foreclosure.com can be used by both investors as well as homebuyers looking to save tens of thousands of dollars on their purchase. This is one website you must have a membership with if you are serious about foreclosures.
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