3 Stages of Buying Foreclosures
The strategy of buying pre-foreclosures is to create a situation where everyone wins. This type of strategy involves just you, the homeowner, and in some cases the lender. Because the homeowner has been delinquent on his or her mortgage payments, they are now in a position to entertain offers made by investors. Keep in mind, you may not be the only investor looking at this property. However, when buying pre-foreclosures, you can expect very little competition.
When buying pre-foreclosures like this and in turn make a profit, you must do some research on these types of properties. The following are some basic guidelines:
1. locate loans in default,
2. evaluate each property by comparing and contrasting location, price, and property condition
3. narrow your selections to a few
4. inspect the properties
5. determine the property owner’s needs, his motivation and flexibility
6. determine the market value of the property, fix-up costs, potential sales price and profits
7. arrange default work out by negotiating with the owner and the lender
8. close on the property, fix it up, and flip it quickly
