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Pre-Foreclosure
Buying during the preforeclosure period is one of the best ways for anyone to get involved in real estate investing. With little more than a few hundred dollars and some specialized knowledge you can buy a house at a substantial discount and resell it retail picking up a five figure
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Foreclosure
The legal process by which an owner's right to a property is terminated, usually due to default. Typically involves a forced sale of the property at public auction, with the proceeds being applied to the mortgage debt. |
Auction Properties
Buying foreclosures at auction is an excellent way to buy property below market value. Most homes are auctioned right at the courthouse steps. The property is auctioned off to the public and the person with the highest bid gets the property. Make sure you do your homework first, as every house is sold on the spot “as-is”. |
REO Properties
The bank now owns the property and the mortgage loan no longer exists. The bank will handle the eviction, if necessary, and may do some repairs. They will negotiate with the IRS for removal of tax liens and pay off any homeowner’s association dues. As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property. |
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Being a good buyer and manager are still critical to your success. But, buying the wrong property or holding title in the wrong entity may expose you to expensive lawsuits and unnecessary taxes.
Don't put years of hard work at risk by using the wrong strategy. It's just as easy to do it the right way.
Do not get too excited, though, because most properties either have too little equity for people to bother with, or have so much equity that a large crowd will show up to compete. |
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