A foreclosure is when a bank sells off property that its owner failed to make payment for. How can you invest and make lots of money in this kind of business? Very simple. Banks will usually sell off these properties for less than what their market value is. The reason that the banks do this is because they have no use for these properties and want to get rid of them as soon as possible. By buying these properties, you have the opportunity of flipping them for a great profit. Foreclosures, just like any other real estate investments, are very profitable when executed correctly.

Pre-Foreclosure

When the owner of a property is behind on payment and the banks haven’t sold the property, this is the pre-foreclosure period. You have the chance to buy the property at a lower cost than it would to take over the mortgage payments. Usually, you will have to act quick because the pre-foreclosure period is rarely over a month long.

Foreclosure Auctions

The banks will have an opening bid for the properties that they are selling. People that are looking to invest in foreclosure properties would then make offer an amount that is higher than the opening bid. The idea is to get the winning bid at a low amount so that the profit is greater.

REO Sales

REO (Real Estate Owned) is when a bank has already completed the foreclosure process with the state and hold the title for the property. Usually, they will list these properties with a real estate agent. They will also try to sell the properties at the market value price. As mentioned before, the banks will want to get rid of these as soon as possible so they will not always wait for the full price to be offered to them. You can usually pick these up for under the market value price.

• Five Benefits of Loan Modification
• The Bankruptcy vs. Foreclosure Issue
• Pre-Foreclosure Buying Tips and Etiquette
• Five Low Risk Investments for Beginners
• Assuming a Mortgage Loan