Right now we are experiencing one of the most prevalent times for house foreclosures, so right now is the time to invest. Over the past year the number of house foreclosures has been steadily increasing and we are certainly experiencing peak levels at the moment. If you have been thinking of starting a business by investing in these properties, the time is definitely right.
Home owners who have defaulted on their mortgage loans for longer than a certain period of time are definitely going to be going through the foreclosure process before very long. This is often due to unemployment or increases in the interest rates making the house unaffordable.
There are number of ways of tackling the owner of a home who knows they are going into foreclosure. Bear in mind that in the pre-foreclosure stage, the home owner does not really want to go into foreclosure, but they don't have the money to do otherwise, so running an ad in a local news paper or real estate magazine could be a way of attracting them to you. It is not easy to approach a home owner who knows they are being foreclosed upon, so rather let them come to you.
It is possible in some instances to offer the home owner 50% of the value of the equity in the home, be sure that they provide you with all relevant information including the mortgage documents and any liens. In this way you can negotiate with lien holders, and make them an offer. These liens can usually be paid at greatly discounted rates in the pre-foreclosure phase as once the house foreclosure has taken place; the liens are generally dissolved by the major lien holder.
Make sure that you have financial pre-approval; waiting for approval could mean that you lose out on a really good bargain. If you haven't got the finances available and the foreclosure date is close then you might lose the property. Pre-approval will accelerate the process considerably.
Before every making an offer to a home owner, do your homework. The equity on the home is used to establish a market value. Other similar homes in that area will also give you a good idea of the potential market value of the house foreclosure you wish to invest in. Presently it is a buyers market so bear this in mind also, you might have to hold onto the property for a while before you can make a profit on it.
Ensure that you take a look at all repairs that have to be made on the house foreclosure; chances are that if the home owner couldn't afford to pay the mortgage, then he couldn't afford to make any necessary repairs. These repair costs have to factor into your offer. Never make the mistake of offering too much money without considering all the factors that play a role in the amount of your offer, this could lead to losses rather than profits.
Search foreclosures by state or get more information on foreclosure houses at ForeclosureRepos.com.
Kevin Simpson, GM Sales & Marketing
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