Risks and Rewards Of Foreclosure Investing

Foreclosure Investing

There are many inherent risks as well as tremendous rewards when investing in foreclosures. I can't tell you the number of times I've noticed someone buying a foreclosed house not understanding that he/she is getting a whole lot of liens that are sitting on that house.

Why??? Because they didn't do their research.

I recently came across a great little article that goes into this same topic titles:
"Comoaring The Risks and Rewards of Foreclosure Investing"

"Buying Pre-Foreclosures

Buying pre-foreclosures involves working directly with the homeowner and sometimes the lender. Your goal is to create a Win-Win scenario. One win is for the homeowners (they make a sale) and one win is for yourself (you buy the property at a substantial discount).

To accomplish a successful purchase, most experts recommend the following: (1) locate loans in default, (2) evaluate and narrow selections to pursue, (3) inspect the property, (4) evaluate the property owner's needs, (5) determine the market value of the property, fix-up costs, potential sales price and profits, (7) arrange default work out by negotiating with the owner and the lender, (8) close on the property, repair and resell it quickly.

Pros: This is a great investing opportunity if done correctly. Discounts off market value can range from 20% to 35% on average. A low cash down payment is possible if structured properly. You have ample time to research properties. Unique and flexible sales agreements are possible.

Cons: It is sometimes difficult to contact the property owner. You will usually have a lot of competition. The court house research can be cumbersome. You may need to negotiate with the lien holders." .........

http://www.trel.com/foreinvest.html

Good luck and DO YOUR RESEARCH

file under: foreclosure investing