3 Ways to Big Profits With Foreclosure Investing:
Foreclosure investing is undeniably one of the best ways for beginners to make good profits in real estate. Here are three ways to earn income with foreclosure investing:
Buying at the foreclosure auction: Buying homes at foreclosure auctions can be a good way to profit from foreclosure home investing. Foreclosure homes sold at foreclosure auctions usually sell at deep discounts, and you can walk away with some fantastic foreclosure investing deals. Remember, though, that you will most likely be in competition with other bidders, especially if the house is in a great location, or has a lot of equity. If you are the winning bidder, you will need a cash deposit ready at the auction, with the balance usually due in one month, or less. Even though a large amount of cash is necessary in a relatively short time when buying a house at auction, this means that you can get auctioned houses at deep discounts, making them very profitable foreclosure investing deals.
Buying bank-owned houses: Bank-owned houses, also known as REOs, also offer great opportunities for foreclosure investing profits. When a house doesn’t sell at the foreclosure auction, the foreclosing bank gets stuck with the property. Banks aren’t in the business of owning real estate, and are anxious to get rid of them. They will sometimes take a loss just to be rid of them and this creates a wonderful opportunity to get a property at a deep discount.
Buying preforeclosure houses: When the bank starts the foreclosure process on a home, the time period before the foreclosure auction takes place is known as “preforeclosure.” Preforeclosure homes are the best opportunity for beginners who would like to create opportunities in the foreclosure arena. During the preforeclosure stage, the homeowner is usually anxious to sell in order to avoid a foreclosure. For anyone interested in foreclosure investing, the advantage is that the homeowner is likely to let the house go at a bargain price just to be rid of it. A huge foreclosure investing advantage here is that you can do it without a lot of cash up front — even if you have poor credit. All that’s required is the contract deposit, which can be as little as $10. You then “flip” the house (you are actually ‘flipping’ the contract) to another buyer.
These three strategies offer unique foreclosure investing opportunities. For many beginners, preforeclosure investing is the best way to get started because you can legally tie a property up by signing a contract with a homeowner, then ‘flip’ your contract to another investor for a hefty ‘finder’s fee’.