| When it comes to real estate investing, | | | | foreclosure. These stages are |
| making money off of foreclosed homes is a | | | | pre-foreclosure, auction/trustee sale, and |
| highly specialized area that can become | | | | real estate owned. There are pros and cons |
| aggressive as well. This is because | | | | to completing your purchase during each of |
| investing in foreclosed real estate is a | | | | these stages, so you might find that you |
| specific market and those that are involved | | | | prefer to close the deal at a particular |
| in this form of investment tend to be highly | | | | stage. This is entirely up to your personal |
| educated when it comes to making money in | | | | preference. |
| this manner. Therefore, before you get | | | | |
| involved in real estate investment, it is | | | | During the pre-foreclosure stage, the |
| important that you become as educated as | | | | homeowner has received a certified letter |
| possible about buying and selling this type | | | | stating that the home will be foreclosed upon |
| of real estate for the most profit. | | | | if payments are not made current by a certain |
| | | | date. You can approach a real estate owner |
| Understanding Foreclosure | | | | at this time and offer to purchase the |
| | | | property before the foreclosure occurs. |
| When many people think about foreclosed | | | | There is little risk involved with purchasing |
| properties, they envision homes that are | | | | property during this stage and you can also |
| falling apart or that are infested with | | | | enjoy the satisfaction of helping someone get |
| termites or covered in mold. The reality is | | | | out of a bind, though you need to make sure |
| that foreclosed homes can be mansions or | | | | there are no judgments or liens on the |
| pieces of commercial property that are worth | | | | property before you finalize the deal. |
| millions of dollars as well. Remember, | | | | |
| properties are not necessarily foreclosed | | | | During the auction stage, the property has |
| upon because they are condemned or because | | | | been put up for auction or put up for what is |
| they were not properly cared for. Rather, | | | | referred to as a trustee sale. This step |
| the previous owner simply failed to make | | | | occurs when the owner fails to bring the |
| payments on the property. When this happens, | | | | payments up to date in accordance with what |
| the lender takes the property back and sells | | | | was stated in the letter that was received in |
| it in an attempt to regain the money that has | | | | the previous stage. During this stage, you |
| been invested into that particular piece of | | | | can purchase the property by paying the |
| real estate. | | | | lender so it does not have to take the |
| | | | property back. As a result, you can often |
| Choosing Your Niche | | | | receive a discounted price. To buy the real |
| | | | estate at this time, however you will need to |
| When you decide to become involved in real | | | | have the cash needed for the purchase. You |
| estate investment by specializing in | | | | also have to purchase the property "as is," |
| foreclosed properties, you will need to first | | | | which can be a risk if there are problems |
| determine your niche. In other words, you | | | | with the property. |
| should start off by targeting one type of | | | | |
| property. Perhaps you will focus on "fixer | | | | If no one purchases the property at auction, |
| uppers" that you will repair and then sell. | | | | the lender had to buy it back. It is at this |
| Or, maybe you will specialize on commercial | | | | point that it is considered Real Estate |
| properties. | | | | Owned. At this stage, the lender may attempt |
| | | | to make a profit from the property. |
| Whatever you decide to specialize in, the | | | | Nonetheless, you can typically get a good |
| chances are that you will have plenty of | | | | discount at this stage. In addition, waiting |
| properties to select from. In fact, the | | | | until this stage provides you with more time |
| number of foreclosure properties available | | | | to do research on the property ahead of time. |
| each year in the United States is topping | | | | |
| half a million and those numbers continue to | | | | Real estate investment can be an excellent |
| grow. | | | | way to make extra money and to plan for your |
| | | | future. At the same time, you need to take |
| Picking the Right Stage of Foreclosure | | | | the time to learn about this type of business |
| | | | and to understand the pros and cons of |
| As you explore the possibility of purchasing | | | | investing at the various stages in order to |
| foreclosed real estate, you will need to | | | | make sure you minimize your risks and |
| learn more about the three major stages of | | | | maximize your profits. |