Intro To Foreclosures – Find Big Profits

Did you know that there is quite a bit of profit to be made in foreclosures? If you can purchase a property that is in one of the three phases of foreclosure, you have a good chance to find a real bargain.

Of course, it takes a bit of knowledge to be successful purchasing foreclosures. And once you gain the knowledge, you need to put the time and effort into it in order to find the property that’ll give you the profit you seek.

Let’s go into some of the basics in the foreclosure process

There are three types of foreclosures:

• Notice-of-Default (NOD)
  
• 
  
• Notice of Trustee Sale (NTS)


• Real-Estate-Owned (REO)

Notice of Default and Notice of Trustee Sale are pre-foreclosures and REO’s are properties that a bank has re-purchased. Most likely, you’ll find the best profit with one of the pre-foreclosure options. By the time the bank has bought the property back, they’ll want close to market value for it.

NOD’s and NTS’s offer you the chance to negotiate directly with the homeowner. You can also wait and try to pick up the property at a foreclosure action sale. The third option is, of course, to wait until the bank has taken it back (REO).

Here are some pros and cons to buying NOD’s or NTS’s:

PROS:

• You get the chance to inspect and check out the property


• Good opportunity for both the homeowner and buyer to negotiate a win-win situation


• Potential for high profit

CONS:

• You’re under pressure to get the sale done before it goes to auction


• Homeowners can be hard to negotiate with

Here are some pros and cons to buying at a foreclosure auction:

PROS:

• Potential for high profit


• You take ownership of the property right away

CONS:

• You don’t get the chance to inspect and check out the property


• There will be many real estate professionals there who you’ll be competing with


• You must have 100% of the cash available to make the purchase

Here are some pros and cons to buying an REO foreclosure:

PROS:

• You get the chance to inspect and check out the property


• Bank will often have re-habbed the property already


• You can get regular bank financing

CONS:

• Potential for high profit is low

You have the potential to make a lot of money in foreclosures. However, this is meant to only be a quick introduction to the subject. I recommend you do some research for more information. There are many great books on foreclosure that you can read. It’ll be well worth your time to learn some skills in the area of foreclosure real estate.