With the current state of the real estate and financial markets, it seems everyone thinks there is a great opportunity in the foreclosure market. Let me set this straight – There IS, IF you do it correctly!
Buying foreclosed homes can be an incredible way to “buy low, sell high(er)), but there are also several pitfalls that you can fall in to if you’re not very careful.
Buying at the foreclosure sale isn’t necessarily the best way to go. There may be major problems with the property that you don’t know about, since most people who buy at auction never see the inside of the property, especially if it’s occupied.
Additionally, there is cash required typically, or at least within a few days of the winning bid. This can be difficult for most would be investors, AND you’re also risking that capital on something that could potentially be very risky.
There is a better way. The Short Sale.
When you buy directly from the homeowner via a short sale, there are several huge benefits; You get to see the property, and even inspect it professionally if you choose. You can insert specific clauses into your pruchase contract that give you an “out” if you decide not to move forward. Sometimes you may not get an approval letter from the foreclosing lender in the amount that you wish, or at all.
You can also work on lining up a buyer for the house while you or your negotiation company is negotiating the short sale. You can then do what’s called a “Simultaneous Close”, where you buy and resell the same day, virtually eliminating any risk, while capturing a profit.
To learn more about short sales and investing in foreclosures, you can visit our page and get a free ebook on the subject that actually covers more than most paid for courses. Learn the Secrets to Buying Foreclosed Homes.
Sincerely,
David Corbaley
