Investing in bank foreclosures can be very rewarding, filled with opportunities. It is also a business that one can stay with long-term because there is never a shortage of bank foreclosure property.
* Pre-foreclosure � Pre-foreclosure is the period of time between the owner defaulting on the mortgage and sale, or law date of the foreclosure. During this time, the owner has the option of paying off the debt and avoiding a bank foreclosure on his or her credit report. The easiest way to do this is to sell the home and use the proceeds to pay off the mortgage.
* The Auction � In a foreclosure by sale, the property is sold at public auction to the highest bidder.
* REO � Real-estate owned, or REO, property is property the lender has taken possession of during a strict foreclosure. Typically, a lender does not want to deal with owning property, so they sell.
But how do you get started in bank foreclosure investing?
While learning about bank foreclosures may not seem exciting, it is important to understand how the properties are bought and sold. An investor needs to know how to evaluate the property and determine its market value.
Every state has different property laws. These laws not only apply to titles, sales and ownership, but also to what can be done with property during bank foreclosure. Some states use mortgages, while others use trust deeds. Each has its own rules and regulations, and it is necessary to know how they apply before investing.
3. Make it a win/win situation.
Whether dealing with a property owner in pre-foreclosure or a lender after the bank foreclosure, the deal is a winning situation for both of you. In the case of the owner, they are selling the property to pay off their mortgage, thereby avoiding having a foreclosure against their credit. For the lender, they are getting rid of a piece of property that they really don�t want to deal with. You are getting a piece of property that will make you money. When negotiating, be sure to show the other party how they can come out ahead with your deal.
4. Make sure you can afford it.
You need to be able to cover the expenses of finding bank foreclosures for investment. If you cannot afford to buy the foreclosure, however, there are investors who will finance the purchase for a share of the profits. While giving a share of the profits to investors may seem like it costs you money, it does allow you to buy the property without going to lenders and going in debt.
Investing in bank foreclosures can be very profitable, but it does take time to learn the ropes to making big profits. In the meantime, enjoy learning your trade. Have fun running your own business. It will make the experience even more rewarding.