| The process of mortgage foreclosure presents | | | | involves biding against the lender and other |
| three good opportunities for investment - | | | | competition. The process of auction is a very |
| Default/Pre-Foreclosure, Auction/Sale and the | | | | fast and normally requires payment in cash |
| REO.Buying Default/Pre-ForeclosuresThe | | | | within 24-48 hours.You could get good to |
| process of buying pre-foreclosures involves a | | | | excellent discounts and get a wonderful |
| direct interaction with homeowner and the | | | | return on investment in the end. By far the |
| lender. The objective here is to make the | | | | best investment, if you do not consider the |
| homeowner win by selling and win yourself by | | | | time wasted on postponed auctions, expensive |
| buying the property at a discount.The whole | | | | title searches and risks of improper |
| deal as outlined above could be a great | | | | research.Buying REO'sThe easiest way to |
| investing opportunity, but, timing and | | | | buying foreclosed real estate is buying REO's |
| procedure is everything. You could discount | | | | (real estate owned). An REO is a category of |
| the market value on closure anywhere up to | | | | property where the lender repossesses the |
| 35% on an average. If you act in time and | | | | property to cut losses and wants to dispose |
| structure the deal properly, you may even get | | | | it off for cash, since the lender is not in |
| away with a small down payment. The ale | | | | the real estate business.The lender is the |
| agreements can also be tailored to your | | | | only lien holder, 90% of the time which means |
| advantage by keeping them unique and | | | | that the REO will have a clear title (saves a |
| flexible.The other side could be that the | | | | lot of cost and heart burn). The property can |
| owner is not available to deal. A lot of | | | | be assumed free of all liabilities and |
| competition is out there looking to cut you | | | | repairs since the lender has the major |
| down. Research in the court could be | | | | interest. The property thus, may be ready for |
| confusing and take up valuable time. | | | | resale once it is purchased although the |
| Negotiations with lien holders are not ruled | | | | savings may be small (usually 10-15%).Buying |
| out.Well, you are out there to make a nice | | | | foreclosed real estate can be a profitable |
| and tidy profit and these small encumbrances | | | | business if you do your homework before you |
| would not really hurt.Auction BuyingBuying | | | | invest and have the right backing of |
| foreclosed real estate in a court auction | | | | financiers to finance your acquisitions and a |
| could be the most rewarding and the most | | | | good marketing network to attract buyers. |
| risky at the same time. The bidding normally | | | | |