The Experts In Real Estate And Mortgages

In order to get good at buying and reselling foreclosures you need to understand the process,

Foreclosure starts off as a default when a borrower gets behind on payments and the lender demands control of the property to repay the debt since that is the collateral.

The causes of foreclosure are many and can be for :

– loss of a job

-death

-increase in payment due to balloon or rate increase

-sickness

-divorce

-abundance of debt they can no longer afford

-and many more.

The foreclosure process differs slightly in each state but here is the basic procedure; 1.payments are late, 2.bank sends a demand letter, 3.then a preliminary notice of foreclosure, 4.then an official complaint, 5.notice of default, 6.gets a final judgment from the court,7. a sale date is posted , property is sold at the courthouse, 8. borrower has one last opportunity to get the house back called “ The right of redemption”-it is a specific period of time to repurchase the home that was previously foreclosed.

Payment is late but not yet public knowledge-you can only find these by the owner advertising it or someone has been told about the situation.

You can advertise for these in newspapers, on signs, billboards. When you find these deals remember that you are dealing with the owners and the best way to get the deal is to help the seller get what they need, which is not always selling the property. It may be helping the negotiate with the bank to save the home.

This makes you the nice guy and they may be back in the situation again and guess who they will call when they have to sell the house? You.

Pre– Foreclosure means they are now at the point where it is now entered into public records. Now a lot more folks are aware of the situation and it becomes more competitive now that a NOD or notice of default has been filed.

As a real estate investor you must still work with the borrower at this time and they only have two choices: bringing the loan current or sell the home to pay off the mortgage owing.

If neither of these two remedies occur it will soon be time for the auction. The action date is advertised and the auction is held at the courthouse where the lender tries to recoup the balance owed and taxes, attorneys fees, penalties, interest, court costs etc.

A deficiency judgment can force the homeowner to make up the difference between what they owed the bank and what the home was sold for, allowing the bank to seize other property or assets.

The auctions usually require cash or a cashiers check.

If the property is not sold at auction the bank takes it back (REO) and place with an agent to market it. Now that it is with an agent you  can have it inspected make arrangements for financing and still use the double or simultaneous closing to sell to another investor or end user  quickly.

If you do buy at the auction make sure you have previously checked for liens, other mortgages and get the former owner to sign a document waiving their right of redemption.

Remember that if you get to the owner in the pre-foreclosure stage you may be able to offer several different strategies to control the property using lease options, subject to existing financing and others that you cannot use later.

As you can see, there are a lot of things involved in the process of buying foreclosures and knowledge of the various techniques such as no money down investing and safeguards in the contracts , <(read post on creating contracts)is definitely going to help you make more money but also protect you from making costly mistakes.

I recommend the following sources of additional training if you want to make the most profit as a real estate investor.

Suggested reading:

Learn how to buy Foreclosures.

The Ultimate Real Estate System-Become a real estate investor the right way– Learn how to buy with no money down, bad credit, create bulletproof contracts, lease options and a ton more. World renowned investor tells all.

Massive Profits In Foreclosure-Earn $10,000 in 30 days with Foreclosures

Fix your credit– Raise your credit scores and remove negative credit

Free Nationwide Foreclosure Lists-Look for foreclosures in every state 

Investing in pre foreclosures and foreclosures as well as short sales are one of the best ways to find great real estate deals because they are a combination of a motivated seller and a distressed property.

We will discuss short sales in the next post.

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Posted under Foreclosure & Mortgages & Real Estate & Short Sales & credit repair & real estate investing |