Making Money with Foreclosures: Your Options Reviewed
 
Making Money with Foreclosures: Your Options Reviewed

The poor economy has left the real estate market in poor condition. Many homeowners are unable to pay their mortgages. And, those who try to sell for a profit are seeing their houses sit on the real estate market for months on end. You might assume this isn't the best time to buy, but that couldn't be farther from the truth. If you are in good financial standing, you can use foreclosures to your advantage. You can use them to make a profit. How?

The first step in profiting with foreclosures is to buy foreclosed properties. Whether you want to buy one property or one hundred, you have a number of options. What are they?

Foreclosure auctions. Foreclosure auctions come in a number of different formats. In most cases, it depends on the state. For example, some foreclosure property auctions are held on the steps of local government office buildings. In these instances, only a few properties are auctioned. On the other hand, they can take place in large convention centers or meeting rooms. In these instances, there are usually hundreds of properties auctioned.

If you wish to purchase foreclosed properties at a foreclosure auction, you need to secure financing ahead of time. Many times, you are required to make a down payment or submit full payment in less than 24 hours. It is rare to find a lender for these situations, unless you have a spotless credit history. Lenders don't like to hand out money just with the possibility.

Mortgage Lenders. Although not always classified as foreclosed properties, Real Estate Own (REO) properties are just like foreclosures. The financial lender has repossessed the home due to non-payment. Small lenders are likely to turn to a real estate agent. Large lenders will handle the sale themselves. They will post fliers in their offices, advertise in local newspapers, and post the listing on their website. When listed directly through the mortgage lender, you can get a good deal. You also have bargaining power. The longer a REO home sits unoccupied and paid for, the more money the lender loses.

Short sale foreclosures. Short sale foreclosure properties are soon-to-be foreclosed on. In fact, it isn't a matter of if, but when. With these types of properties, the homeowner and lender decide that payment is impossible. Instead of taking a loss and entering into lengthy and costly foreclosure proceedings, they decide to list the home for sale. The selling price is typically less than the outstanding mortgage due. This is your best chance to profit. If the homeowners have occupied the home and made payment for a number of years, little may be left on their mortgage.

As you can see, there are a number of ways that you can buy foreclosures or soon-to-be foreclosed properties. If your intent is to make a profit, the next step will be important. Look at the properties purchased or the properties you intend to purchase.

Single-family homes can be resold for a profit. By opting for a REO sale, foreclosure short sale, or a foreclosure auction, you should automatically make a profit. This is because you paid less than the home's value. However, you can also make improvements to the home, increasing its value, and its selling price.

Multi-family homes can also be resold for a profit, but a unique approach is to become a landlord yourself. Make needed improvements to the home to prevent complications or complaints for tenants down the road. Charge a rate that is in line with other rentals in your area. If the multi-family home is occupied with tenants, keep them. You will get paid right away! Since you paid a reduced rate, it will not take long for you to profit with paying tenants.

In short, you can profit many ways from the poor real estate market. In fact, poor isn't the best word to describe its current state. Yes, homeowners and real estate agents are finding it difficult to sell homes, but you can still turn a profit. You just need to know how and now you do!

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Articles
Buying Short Sale Properties: The Importance of Preparation

Buying Short Sales: Dos and Do nots

Buyers: How to Convince a Mortgage Lender to Agree to a Foreclosure Short Sale

First Time Buyers: What to Expect with Short Sales

Foreclosure Short Sales: How They Get Started

First Time Homebuyers: 5 Reasons to Examine Short Sales

Homeowners Options to Avoid Foreclosure

How to Avoid Paying Too Much for a Short Sale Property

Buyers: How to Convince Borrowers to Opt for a Short Sale

How to Find and Buy Short Sale Homes

Landlords: 5 Reasons to Examine Foreclosure Sales

Making Money with Foreclosures: Your Options Reviewed

First Time Investors: 5 Reasons to Examine Short Sales

The Pros and Cons of Buying Foreclosure Short Sales

Pros and Cons of Buying Short Sales as First Homes

Short Sale Information: What You Need to Know as a Buyer

Foreclosure Short Sale Information: Frequently Asked Questions

Short Sales and Underwater Properties: What You Need to Know

Short Sales: Should You Let the Sellers Rent?

Short Sales versus Foreclosures: Which Should You Buy?

Foreclosure Short Sales: What They Are and How to Profit

Which Short Sales Are the Best to Profit From?

Who Benefits From Foreclosure Short Sales

Why Foreclosure Short Sales are Good for Homeowners

Why Lenders Agree to Short Sale Foreclosures

 

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This site is a common sense guide to Making Money with Foreclosures: Your Options Reviewed. In practical advice websites, like anything else in life, there are no guarantees of income made. Readers are cautioned to reply on their own judgment about their individual circumstances to act accordingly.

This site is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.

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