Pre-foreclosure deal as first investment

1 Reply

Hello BP! First post! Gathered the confidence to simply ask for advice, important information, strategies on investing in preforeclosures. I have a few leads in place, working on contacting the borrower, what I'm unsure of the complete process on how to purchase the property (obviously at a discount). Thank you in advance!

Originally posted by @Adolfo Blanco :

Hello BP! First post! Gathered the confidence to simply ask for advice, important information, strategies on investing in preforeclosures. I have a few leads in place, working on contacting the borrower, what I'm unsure of the complete process on how to purchase the property (obviously at a discount). Thank you in advance!

Your first lesson learned will probably be the fallacy of purchasing at a discount. If it's in active foreclosure, you may be subject to some pretty stiff rules about equity stripping with an unsuspecting homeowner. Assuming the state you are interested in doesn't have said protections against this type of activity, you may be faced with the competition from others trying to do the same thing. If not, you may be faced with the economic reality of a real estate shortage in many areas, that will cause properties in foreclosure to be sold at or very near market rate if they get to the auction block.

Yes, foreclosure "deals" (preforeclosure, etc.) are still out there but there is less meat on the bone than there was in previous markets and, there are many other players working those fewer deals that are left, that have been doing it longer, and have deeper pockets.