Top Reasons to invest in Pre-foreclosures
You have decided to join others and begin selling real estate. You have heard all the claims of how much money others make with their real estate investments especially with property in pre-foreclosure stage. But, now you are wondering what the real benefits are.
You may have only been considering investing in real estate because you think that it takes more money than you have. Some people believe that you need several thousands of dollars and a large down payment and great credit. It's great if you have all of
those things, but the truth is that you can get into real estate with a small amount of money. You can purchase a home way below market value and then resell it for good profit.
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A home goes into foreclosure when a homeowner defaults on their mortgage loan. Then the lending company forecloses on the property and the home is sold at a sheriff's sale or public auction. Prior to the time, that the property goes to auction is the pre-foreclosure
time. This is the time that you wish to step in and purchase the property, so you can make a higher profit. If you have, the knowledge that others already have you can purchase a home a very large discount and then sell it for a profit of over five figures.
Here are the reasons you can do this.
- Pre-foreclosures are what are considered to be a niche market. If you focus, only on foreclosures instead of putting your apples in several baskets you will soon become an expert on foreclosures and learn all the ins and outs to make a large income.
- When homeowners are in default, the home is just sitting there and no one is making payments to the lending company to repay the loan. Remember, as long as you are negotiating to purchase the property the lending company is not getting any money. Use this to your advantage.
- Banks do not have the desire to take back every property where a homeowner is in arrears in their loan payment. The bank many times will take less than what is owed on the loan.
- Pre-foreclosure homes are normally much easier to purchase because the homeowner wants to get out of debt and save their credit as much as the lending company wants their money.
- Lending companies would rather liquidate bad loans that repossess them.
- You may even find some home in pre-foreclosure that allow you to take over payments on the mortgage loan. With this type of loan, you will find that you do not even have to qualify for the loan and all that will be owed is what is left on the original mortgage loan.
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