Profiting from Real Estate Foreclosure Investing 3 Ways to Profit from Real Estate Foreclosure Investing
With the credit crunch still creating waves upon the world economy, foreclosed properties are a common sight. Even though foreclosures tend to strike a depressing image, investors may find themselves in jovial celebration.
What Exactly are Foreclosures?
Foreclosures happen when the owner cannot pay his or her debt to a lender such as a bank. During a mortgage agreement between owner and the lender, the property was used as collateral for a loan. The foreclosure follows the contents of the mortgage contract wherein the mortgagor has to surrender ownership to the mortgage upon failure to comply with the terms of payment.
Why Buy Foreclosed Properties?
So what is the difference between properties that are foreclosed and those that are not? Typically, properties involved in foreclosures are cheaper because they can be bought way below market prices. It is this fact that makes them desirable for real estate investors.
There are three possible opportunities to buy foreclosed property. What you choose actually depends on who you want to deal with. Each one has its own advantages and disadvantages.
Finding Foreclosed Properties
The first option is to try and buy property during pre-foreclosure. Pre-foreclosed properties are homes that are still owned by the home owner. This means the bank hasn't taken possession as yet. The current owners are very motivated to sell the house to get themselves out of trouble, so you could easily pick up a great bargain.
What is a Court Auction?
The second option is buying during the court auctions after the property has been foreclosed upon. The disadvantage to an investor in this situation is that if there are several bidders at the auction, this could drive the price higher than you were willing to pay.
Purchase Directly From Lenders
The third option you have for buying homes in foreclosure is to wait until the property has been fully acquired by the bank. As bank's have no interest in investing in real estate, they'll happily negotiate a fair price with you that covers their costs. This can sometimes mean finding a bargain priced investment property that cost much less than the real market value.
Whichever option you choose, it's always vital that you inspect the property thoroughly and investigate the true extent of any debts outstanding against the home.
In some circles, real estate foreclosure investing is considered one of the most lucrative investments given the low price (sometimes even less than wholesale). This claim is supported further by the current global crisis and its effects on property values. In some parts of the United States, property values can go as low as a few hundred dollars. Many foreign investors have already taken notice of these properties and are going into a buying frenzy.
Despite their low prices, the potential profits from these properties and still debatable especially during these times. As in other real estate ventures, caution is always advised. - 23196
What Exactly are Foreclosures?
Foreclosures happen when the owner cannot pay his or her debt to a lender such as a bank. During a mortgage agreement between owner and the lender, the property was used as collateral for a loan. The foreclosure follows the contents of the mortgage contract wherein the mortgagor has to surrender ownership to the mortgage upon failure to comply with the terms of payment.
Why Buy Foreclosed Properties?
So what is the difference between properties that are foreclosed and those that are not? Typically, properties involved in foreclosures are cheaper because they can be bought way below market prices. It is this fact that makes them desirable for real estate investors.
There are three possible opportunities to buy foreclosed property. What you choose actually depends on who you want to deal with. Each one has its own advantages and disadvantages.
Finding Foreclosed Properties
The first option is to try and buy property during pre-foreclosure. Pre-foreclosed properties are homes that are still owned by the home owner. This means the bank hasn't taken possession as yet. The current owners are very motivated to sell the house to get themselves out of trouble, so you could easily pick up a great bargain.
What is a Court Auction?
The second option is buying during the court auctions after the property has been foreclosed upon. The disadvantage to an investor in this situation is that if there are several bidders at the auction, this could drive the price higher than you were willing to pay.
Purchase Directly From Lenders
The third option you have for buying homes in foreclosure is to wait until the property has been fully acquired by the bank. As bank's have no interest in investing in real estate, they'll happily negotiate a fair price with you that covers their costs. This can sometimes mean finding a bargain priced investment property that cost much less than the real market value.
Whichever option you choose, it's always vital that you inspect the property thoroughly and investigate the true extent of any debts outstanding against the home.
In some circles, real estate foreclosure investing is considered one of the most lucrative investments given the low price (sometimes even less than wholesale). This claim is supported further by the current global crisis and its effects on property values. In some parts of the United States, property values can go as low as a few hundred dollars. Many foreign investors have already taken notice of these properties and are going into a buying frenzy.
Despite their low prices, the potential profits from these properties and still debatable especially during these times. As in other real estate ventures, caution is always advised. - 23196
About the Author:
Wrong time to invest in real estate?? Gary Z. Bryant says your wrong. Find more about Real Estate Investing and Real Estate Foreclosure Investing In Las Vegas
posted by X - Men @ 2:35 AM
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