Foreclosures and Wholesaling

A house in foreclosure could offer a great deal, so check out discounted homes in foreclosure. According to the National Association of Realtors, there will be more than 1 million foreclosures over the next two years. Before you consider buying a property in the foreclosure market, be sure to do your home work. Buying a home in foreclosure can be easy, but it's not without risk. (You might consider using a reverse mortgage product to fund your property investments).
Usually, you can buy one through the state process. It's generally held at the local courthouse in the clerk's office or in front of the foreclosed house. Purchasing a property from an auction, probably represents the highest potential return, but also the most risky.

You might consider buying a home in pre-foreclosure. You can find a house in pre-foreclosure by studying the public notices about homes in default. The information is available from such Internet firms as Homeforeclosures.com, HomeForeclosure.com and RealtyTrac.com. You'll pay a fee, though, for their services.

There probably won't be much competition, if any, because the home usually isn't up for sale. It's a private deal. You offer a price that's less than market value but more than the amount owed on the bank loan. What makes it difficult for people is the idea of approaching a home owner who hasn't put a for-sale sign up yet.

One of the best ways to do a deal is by purchasing a property wholesale and selling retail. The idea of flipping is not very popular these days, but in essence, that is what wholesaling is. All you're doing is buying at a discounted price and than reselling it in a short period of time. There are different types of people involved in wholesaling, such as scouts, dealers and retailers. If you need cash to fund your project, you might consider refinancing your mortgage.

A scout or bird dog, if you will, is someone who gathers information, locates potential deals and then sells the information to other investors. When you become a scout, very little knowledge or money will be required. The scout will locate distressed properties, gather the information and then present it to another investor for a fee. A scout gets paid $500 to $2000 on each lead he provides to an investor, depending on the price of the property and the potential profit.

A dealer will locate a distressed property and enter into a contract with the owner. Dealers sometimes buy properties wholesale and then sell it retail or sell the contract to another investor. Being a dealer is more risky than being a scout because dealers put down their own money to secure the deal. A dealer doesn't have to deal with tenants and can make a larger income without having to fix up the property.

What a retailer does is buy properties from dealers. Retailers fix-up properties using their own money, therefore, assuming the greatest risk, but also receiving the greatest profit.

Hans Anderson is a Real Estate Investor, who's passion is helping people purchase their own investment properties. http://realestateinvestingfacts.com/foreclosures.php http://foreclosurestaxsales.com/foreclosures.php




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Hans Anderson is a Real Estate Investor, who's passion is helping people purchase their own investment properties. http://realestateinvestingfacts.com/foreclosures.php http://foreclosurestaxsales.com/foreclosures.php