PropertyForeclosure.com Blog

While you’re probably aware that pre foreclosure investing is a great way to profit from real estate, you may be finding it hard to come up with ways to find those pre foreclosure properties that others haven’t already thought of. Here are some unique ideas for being the first to find out about potential pre foreclosure investments.

Build your army of pre foreclosure headhunters. Make it widely known to everyone you come into contact with that you buy pre foreclosure homes (you’ll probably have to educate them a little about what to look for). Let them know you’ll offer them a bounty (say, $500) if you end up buying a property they tell you about. Tell your mail carrier, your grocer, your neighbors, your hair stylist, your kids’ parents…and give each of them a stack of your business cards.

Post flyers wherever you can. Post your pre foreclosure bounty offer at your church or synagogue, your health club, your coffee stop, your gas station, the laundromat – anywhere there’s a bulletin board.

Contact utility companies. Sometimes the gas or electric company can be a good source of leads on vacant or troubled property (which may be in pre foreclosure). Make sure they know about you, and that they have your business cards.

Place an ad at a widespread online service such as Craigslist. Millions of people frequent these classified ad services every day, including people whose property is in pre foreclosure, as well as people who may know of a property in pre foreclosure

Don’t limit yourself to single family homes. Other types of properties go into pre foreclosure, too. Mobile homes, duplexes, churches, farms, even raw land can all have owners with financial difficulties that have forced them into pre foreclosure.

These are only a few of the more creative ways to find potential pre foreclosure properties that can result in huge real estate profits for you.

You’ve probably heard that in this soft market, flipping homes is not a good real estate investing bet. But once you really understand what flipping homes is all about, you realize that it’s sometimes best to ignore what you may have heard.

Flipping homes involves finding an undervalued property, rehabbing it and making it appealing, then quickly selling it at a profit. Though it may seem logical that flipping homes works best in a booming market, the reality is that in a rising market, it may be impossible for someone interested in flipping homes to find bargain basement properties in desirable areas.

In a falling market, flipping homes can still be profitable, because your holding period is normally too short for the value of the property to fall lower than the discount price at which you got it. And since you will have raised the value of the property by rehabbing it, your likelihood of making a profit is still high.

Additionally, in the current market, you’ll find many opportunities for flipping homes among foreclosure properties whose owners want to unload their houses quickly in order to get rid of their financial burden and salvage their credit.

In fact, many people who make money flipping homes only deal with foreclosure properties, which can often be purchased at well below the market values. Though foreclosure properties may sometimes require more rehabbing than do other undervalued homes, they can still provide you with great opportunities to profit at flipping homes. Flipping homes can be highly profitable in any market, but there are definite advantages to flipping homes in a soft market.

You may already know about the fantastic profits to be made from foreclosure investing. And while foreclosure investing can be a legitimate and rewarding way to quick profits, it’s not a completely fool-proof way to easy money. Being able to honestly answer the following four questions can help ensure that your foreclosure investing ventures are always good deals (and can help you to stay away from the money pits).

How much money will I need to spend in order to make the house saleable?It’s not a foreclosure investing deal unless you can make a profit. Many would-be investors underestimate the cost of necessary repairs. If at all possible, get an inspection, or at least walk through the house with someone who is knowledgeable about what needs to be done to make the house livable and safe. If you’ll be doing the work yourself, get estimates for material costs. If you’re hiring someone else, get estimates for their total costs to you.

How much time will be required to make the house livable?Be realistic. If you’re doing the repairs yourself, do you have the knowledge, skill, and time to make this foreclosure investing venture profitable? Many a would-be foreclosure investing tycoon has bought a “fixer-upper,” with great do-it-yourself plans to fix it up and sell it at a profit. In many cases, they’ve found themselves years later, still working on a seemingly endless bunch of repairs. And remember, a house that was obviously fixed up by a “do-it-yourselfer” (e.g., with an amateur drywall job) is not likely to be attractive to many buyers.

Is the house in a desirable neighborhood?This is not to say that your foreclosure investing has to take place in only the “best” neighborhoods, but you should keep in mind the level of appeal the property will have to potential buyers. Will a variety of people find the area safe and pleasant? Surroundings are part of the package you’re selling..

If I ask a realistic selling price for this property, will I still make a profit?
With rare exceptions, you can only sell a property at a price the market will support. In foreclosure investing, even if you’ve spent a pile of money on repairs and upgrades, you can’t expect to sell a property for $250,000 when the highest-priced homes in the area are going for $150,000. This is key to foreclosure investing success.

When you mention to someone that you’re interested in pre foreclosure investing, you’re likely to bring well- (and maybe not-so-well) meaning advice bearers out of the woodwork. Save yourself some aggravation by knowing the truth behind these common pieces of pre foreclosure investing “advice” you’re likely to get:

You’d better have a lawyer at the pre foreclosure sale. A lawyer won’t be able to do much at the pre foreclosure sale, since the terms will have already been set. The best protection you can have at this point is your title insurance policy.

If you buy a pre foreclosure property, the owner can force you to sell it back to him within one year. This concept, called the “right of redemption,” exists if the pre foreclosure property goes to the sheriff’s sale, but it does not exist while the house is a pre foreclosure property.

When you buy a pre foreclosure property, you’ll get stuck with huge closing costs. The only closing costs you will have when you buy a pre foreclosure house are the cost of the title insurance policy and the cost of recording the deed.

Most pre foreclosure properties are money pits. Though it’s true that some pre foreclosure homes will need extensive (and expensive) repairs, many, many owners who find themselves in pre foreclosure have beautiful homes. What’s more, because of the situation they’re in, they’re often willing to sell to you at a below-market price, simply to get out from under their burden. But you shouldn’t completely overlook those fixer-uppers, either. Sometimes, you can get them for such a bargain that they’ll turn you a handsome profit, even after the expense of repairs.

Pre foreclosure investing does require some caution, as well as some common sense. But don’t let naysayers talk you out of investing in a market that can yield huge profits.

If you’re looking for a real estate opportunity where the sellers are highly motivated, the properties can often be bought at a deep discount, and the competition is minimal, consider investing in probate real estate.
What, exactly, is probate real estate? When someone passes away, their inheritance is divided between the heirs. When the inheritance includes real estate, it is referred to as probate real estate, or, a probate estate.
Though investing in probate real estate can be highly profitable, many people shy away from it, often because of some common misconceptions. In this article, we clear up three of them.

Probate Myth 1: It’s extremely difficult to buy probate real estate. One of the most difficult aspects of probate investing is simply the waiting, not the imagined red tape or endless hoops to jump through. The process can sometimes be slow, because the decision to sell the probate property must be agreed upon by all of the heirs. But once this occurs, the estate executor can sell the property. Sometimes, the sale of a probate estate must also be approved by a judge. Even when this is the case, the agreement of the heirs is usually all the court needs to approve the sale.

Probate Myth 2: Owners of probate property (heirs) are usually hard to deal with. Although there’s no accounting for individual personalities or family dynamics, many owners of probate real estate are anxious to sell (sometimes even at a below-market price) so that they can settle the estate. Many times, the inheritance money is tied up in the property of the deceased, and a quick sale enables the heirs to pay off the deceased’s debts and divide the remaining inheritance as cash.

Probate Myth 3: Probate real estate is difficult to find. Probate real estate information is a matter of public record. At your local courthouse, you can obtain a list of all wills presented for probate. More courthouse research will uncover the records of deeds to properties held in the name of the deceased. You can also find information about possible probate estates in newspaper obituaries.

If you’re willing to do a little legwork, probate real estate can present a lucrative investment opportunity for you. Even though you do have to do some research, probate investing is much easier and more rewarding than many people believe.

Interested in making money with real estate? Consider pre foreclosure investing ― a great way to begin making money with real estate, without the usual financial scrutiny. But before you start in the world of pre foreclosure investing, you should understand a little about the inner and outer process the owner of a pre foreclosure property may be going through.

You have about three weeks (the usual pre foreclosure period before the foreclosure auction) to contact the owner of a pre foreclosure property, as well as complete the paperwork and title search, obtain funding, etc. Navigate the pre foreclosure period well, though, and you’ll be on your way to making money with real estate.

It’s important to consider that most owners of pre foreclosure property are highly stressed and may be mad at the world for the situation they’re in. At first, they may not be friendly or open to your offer to buy their pre foreclosure property. Though your goal is making money with real estate, their goal, though they may not know how to achieve it, is making it all go away.

So, your more immediate goal is not making money with real estate, but making them realize that you can help them make it all go away, by buying their pre foreclosure property. Help them realize you can rid them of the mortgage debt they’ve fallen behind on, the pre foreclosure, and help their credit remain as unharmed as possible.

One way to begin reaching homeowners in pre foreclosure is by mail. Make your mailings stand out from the barrage of mail pre foreclosure owners are getting from debt collectors. Send them a different colored friendly postcard every few days. Or try hand-addressed “lumpy mail.” This keeps you in front of them as they’re thinking of their alternatives. They’re likely to become curious and give you a call. Or, it may be that the homeowner is already ready to find someone to buy his pre foreclosure property as quickly as possible; in that case, your mailing will have arrived with perfect timing.

Once the owner of the pre foreclosure property sees that you offer hope, he is likely to become very motivated to work with you to end the stress associated with the pre foreclosure situation. Yes, you’ll be making money with real estate, but you’ll also be helping the homeowner out of an extremely painful situation.

A lot of people have heard about foreclosure investing as a way to build wealth, but have shied away out of fear that it requires lots of money to get started, with all that cash tied up and at risk for years. Nothing could be farther from the truth. It’s possible to get started in real estate investing with just $10 of your own funds and to receive profits of $10,000 or more in just weeks.

Indeed, with more and more foreclosed houses coming on the market than ever before, there’s never been a better time to get started. Let’s go step by step through process of investing in bank repossessed homes to give you an idea of what’s involved. By doing several deals like this each year, you can earn $50,000 or more in your spare time with next to no risk.

Investing in Bank Owned Homes

When a bank forecloses on a homeowner, it is required to hold a public foreclosure auction. If there are no bidders at the auction, the bank that is foreclosing ends up owning the property. The property then becomes known as an REO – Real Estate Owned by the bank. An REO is also known as a bank owned home.

Banks do not want bank owned homes and will often take large losses just to get rid of them. Bank owned homes that you should focus on are those that were bought through a conventional loan, not one backed by any government agency. Bank owned homes that had conventional loans on them before they were foreclosed upon will have enough profit margin in them to be worth your time.

To find bank owned homes to invest in, you can follow the preforeclosure notices in your local paper or online at foreclosure listing sites or you can call the foreclosure attorney after the scheduled date of auction. Ask if the preforeclosure was sold at the public foreclosure auction and if not, whether it involved a conventional loan. If so, ask the name of the contact at the bank and that person’s direct phone number.

Three Kinds of Bank Owned Homes to Avoid

As we’ve already mentioned, you need to eliminate bank owned homes that were originally bought with government loans.

Here are three other kinds of bank owned homes that you must avoid:

1. Bank owned homes in poor locations, such as in run-down neighborhoods or very far from town services

2. Bank owned homes that are in such poor condition they should be demolished

3. Bank owned homes in expensive neighborhoods

Look for bank owned homes that are moderately priced in locations where properties sell within two months.

Key Steps Before Making An Offer On A Bank Owned Home

First, before making an offer, ask your real estate agent to determine the fair market value of the bank owned home. Make sure this is a conservative estimate.

Second, go to the bank owned home and inspect it. Create a list of all the needed repairs. You will use this list when making an offer to the bank.

Third, calculate how much money you’d like to make on the bank owned home and come up with an offer based on this amount.

A good rule of thumb is to pay no more than 65% of the fair market value of the bank owned home.

Negotiating With The Bank

When speaking with bank officials, remember that the bank does not want to be in the real estate business and that you are doing them a favor by buying a bank owned home from them. In many instances, you will be the only person to have shown any interest in buying the bank owned home. This works to your advantage.

Another thing to keep in mind is that you must be ready to go on to the next deal if the bank is not willing to sell the bank owned home at the price you would like to pay.

In many cases the bank will be satisfied with just a $100 deposit when you buy the bank owned home . Tell the bank you are not sure in which name you would like to take possession of the bank owned home and that you therefore need the phrase “and/or assigns” after your name in the sales contract. Also tell the bank you need ten business days to decide this. You then have two full weeks in which to find an investor for the bank owned home.

Finding Investors For Your Bank Owned Home

The way you turn buying bank owned homes into a quick profit-making activity is to sell the bank owned home to an investor at a price higher than what you paid. You can find investors by advertising in the local paper with the largest circulation under the headings, “Investment Property,” “Capital Needed” or “Business Opportunities.” Your ad might go as follows:

Buy investment residential real property
in excellent neighborhood 20 to 30%
below market value. 202-555-1212.

Make sure you have voice mail or an answering machine set up to take calls 24 hours a day. Out of every 20 calls you get, one or two are from serious investors. You really only need one! Tell those who seem to be serious investors that you have a bank owned home to sell and will split the profit with them 50/50. All they have to do is put up the money for the bank owned home deal.

Your last step is to go to the settlement at the bank with your investor to make sure that the deal goes through smoothly.

An Example Of A Bank Owned Home Deal

To make this more real for you, here’s an example of a bank owned home deal I did. I found a townhouse in Dumfries, Virginia that was owned by a bank. Because the bank owned home needed a lot of repairs, the bank was motivated to sell it at a very deep discount.

I determined that it would cost a few thousand dollars to repair the bank owned home. Although the bank owned home was worth $130,000, I offered $21,400, and the bank accepted my offer. I did not want to get involved in doing the repairs, so as soon as the bank accepted my offer, I sold the bank owned home to an investor for $55,000. My profit on the bank owned home was $33,600. This bank owned home deal was not difficult. All it took was some patience and persistence. You can do the same and profit with bank owned homes just like I do.

For immediate release:

With stocks on an apparent roller-coaster ride, investors make steady profits in real estate and particularly preforeclosures.

Alexandria, VA — With the rising level of uncertainty in the stock market, a lot of investors are looking to preforeclosure real estate to make a steady profit. Still others are skeptical, believing that you need to have a lot of cash on hand to get started. Surprisingly, it’s really very easy to get started in preforeclosure real estate, and if you go about it the right way, you can start making profits with an investment so small that it’s probably in your wallet right now.

Lance Young, founder of www.propertyforeclosure.com has been making money with preforeclosure real estate since 1987, and is now making his secrets available to the public.

He says, “Most people think you need a license, experience, or a lot of cash to get started in preforeclosure real estate investing. All you really need, however, is ten dollars, a few hours a week, and some good instructions.” Those instructions are what Young is providing.

Young has learned how to profit over $53,000 per year with about 10 hours of work per week. He has taught his preforeclosure method to dozens of people, and many of them are earning $100 per hour or more.

“What I’m talking about is buying and selling preforeclosure properties. Homeowners who are being forced to sell their homes at foreclosure auctions would much rather sell to you at deep discounts that lose it at auction.

You don’t need any real estate experience to be successful with preforeclosures; all you need to do is find the homeowners who are faced with this situation. And, the risk is minimal because I guarantee your success,” says Young. “These homeowners in preforeclosure will often agree to sell you their home at a huge discount, usually 35 to 50 percent,” says Young.

“Simply fill out a real estate contract, putting down a ten dollar deposit on the preforeclosure. After that, all you need to do is re-sell that contract to another investor for a big profit.”

The homeowner avoids foreclosure, you make a profit, and the investor you sell to still gets the property at a nice discount. Everyone is happy, because everyone wins.”

Avoid the pitfalls of foreclosure investing, and earn huge profits your first time out of the gate!

Many people ask me what’s the best way to get their feet wet in real estate investing. They want to earn money without a lot of risk to gain experience and confidence for bigger deals. This is a smart question, because real estate holds a lot of hidden traps for the uninitiated. You certainly don’t want to get yourself into a situation where you lose money you can’t spare. Or where you’re in position to earn lots in the long run but for now, tie up money that you and your family need day to day.

With the experience of someone who’s been there and done it taking you by the hand, you can avoid the pitfalls and reap the rewards of successful real estate investing. Start with preforeclosure deals and probate houses for the following five reasons.

Reason #1: Make money in your spare time.
With preforeclosure or probate houses, all you need to start earning money is 10 hours a week. Evenings, weekends, lunchtimes – just about anyone can spare 10 hours a week to begin bringing in a nice chunk of extra change.

Reason #2: Start making money right away.
Unlike some other methods of real estate investing, preforeclosure and probate houses lend themselves to a fast turnaround. This means fast profits, instead of waiting around for money to come in months or even years from now.

Reason #3: You can start investing with just a $10 contract deposit.
You never have to risk more than $10 with preforeclosure or probate houses. Everything you need to know to make this work is explained in my step by step courses.

Reason #4: You don’t need good credit to start bringing in the dough.
My methods of investing work if you have bad credit, terrible credit or even no credit. Regardless of your financial situation, you can easily turn a profit on preforeclosure and probate houses.

Reason #5: With my courses, you don’t need any prior real estate experience.
Not only do you not need a real estate license to buy and sell houses profitably the way I recommend, you don’t even need to have made any kind of a real estate transaction yourself, ever. My courses explain all the lingo and technicalities you need to know to breeze through the process.

Need some more convincing? See the testimonials at my web site from first-time investors who made $31,463.12, $80,000 and $11,650 in low-risk, low-capital, first-time deals: http://www.propertyforeclosure.com/happy.html