The Opportunity Of Buying Foreclosures
There has never been a better time in the modern history of the United States to make money from buying foreclosures than now. Banks and other lending institutions are repossessing properties at alarming rates while simultaneously they are increasing lending standards to a point that is discouraging many new buyers from entering the housing market. The result is a glut of housing inventory that has caused house values to start eroding and when house values slip, the modern day home-owner cannot afford to sell their home.
The main reason why investors can make money from buying foreclosures is that the banks are the most qualified sellers, meaning ready, willing, and able to sell.
When house prices start to erode, only sellers with substantial equity in their properties are able to sell. Very few sellers are willing but most can't bring their own cash to the table to sell their real estate. The one seller that never has that problem is the bank.
Investors can make money from buying foreclosures during three different stages: when the loan is delinquent which is also called the pre-foreclosure phase, after suit has been served, either through the foreclosure process or a short sale, or after the bank has seized the property and it has become REO - Real Estate Owned.
Any of these methods can be very effective tools for buying foreclosures at steep discounts. It is also important to remember that there are tremendous opportunities in all segments of the real estate market and the key is to work the segment that has the most opportunities.
Some tend to prefer the short sale portion when buying foreclosures. Within this portion of the market, you should focus on single family median level price point homes. By focusing on bread and butter single family properties your opportunities will be the greatest, in number, and your risk will be mitigated because there is a high level of need for your investment.