When it comes to real estate investing, preforeclosures are one of the surest ways for beginners to have fast success. A preforeclosure home is one where the owner has defaulted on mortgage payments, and the bank has started the foreclosure process. The period from the notice of default right up to the time of the actual foreclosure auction is known as preforeclosure.
Preforeclosure homes present a golden opportunity for investors, particularly beginning investors, for several reasons:
Preforeclosure homeowners are usually eager to sell. The owner of a preforeclosure home is usually anxious to avoid foreclosure. He just wants the whole ordeal to be over as soon as possible, and is likely to sell to you at a bargain price, just to get the preforeclosure property off his hands.
You can get preforeclosure homes at huge discounts. As mentioned already, the owner of a preforeclosure home is often eager to sell. This means the home owner is likely to sell the preforeclosure home to you at a price that is well below market value — especially if it has a large amount of equity. This means that you can “flip” the preforeclosure home and earn a substantial profit.
You can get preforeclosure homes no matter what your financial situation. When you invest in a preforeclosure home, you don’t need to have good credit or even any credit. You will not be subjected to financial scrutiny, because investing in preforeclosure homes does not require that you get a mortgage. In fact, you can get preforeclosure homes for just the cost of the contract fee (usually 10 dollars), then simply “flip” the the property (your contract) to another investor for a profit.
Preforeclosure homes are one of the best ways for beginning real estate investors to make huge profits quickly and easily.