How does an invester benifet off another persons foreclosure?
Not sure what you are asking. Investor benefits from buying low and selling high or renting for cash flow.
@Ronnie Neal the normal method is to see if they have substantial equity, and if so buy the property from them for a little over what they owe. Another strategy is to do a short sale with the bank and borrower. That is getting the bank to agree to sell it to you for less than what is owed. This very abbreviated but should get you going.
@Kevin Page What Im asking is what's the process in acuiring a foreclosed property?
Thx Jerry W.
Michigan has loads of foreclosures and finding them is fairly easy. My suggestion is moveinmichigan.com as a start. A variety of auction websites are easily accessible as well.
@Ronnie Neal , I've got to agree with @Kevin Page . The way you opened the topic left me thinking that you're asking a moral/ethical question, like "how do investors sleep at night?". I now understand that you're asking how does the process work.
I'd suggest that you hook up with an experienced investor in your area, someone that you can meet for coffee, who invests in foreclosures already and can show you what to do. You can usually find someone by putting the word out there that you're looking for someone and networking your butt off. Find and attend local real estate investing clubs, ask the nice folks at local community banks, visit every title company and ask them for a referral, etc. Make friends, a lot of friends.
To your original inquiry, however, there are several ways to invest in foreclosures. The first and probably the simplest is short sales. You usually find out about them from a realtor's listing. You negotiate a price with the owner, who then asks the bank to accept the offer. This could be tricky, since you're asking the bank to accept less than what they're owed for the property. There are a lot a ways this can go wrong, so it often takes a long time and the outcomes are uncertain.
Another pretty obvious way is to attend the foreclosure auction and bid on the property. For that you'll need all cash up front, which cuts a lot of us out of that process, but if you can buy at the auction, there are probably a good number of deals to be had. Be careful and do all your homework. Make sure you know what you're buying. If you buy a house only to find that the city just razed the building, your dream investment can be a nightmare.
Maybe you'd be just as happy tracking the properties that go to auction that no one bids on. These become REO's (Real Estate Owned) for the bank. Banks are in the lending business, not the real estate owning business, so they would usually like to get these REO's off their books expeditiously. Make them an offer and do it as soon as possible after the auction, before the bank incurs any more costs. An REO sale is just another "arm's length" transaction, so you don't necessarily need all cash up front like at the auction.
There are a couple more approachs, but I'd say get some experience built up first. I hope this helps. Let me know if you have any more questions.
Happy New Year!
@Account Closed , thanks for the URL. I'm adding it to my bookmarks right away.
thanks alot for that information, and HAPPY NEW YEAR!!!:)
@Jaques Magloire thx alot for the url!
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