Alex Gurevich asked:


If you were a real estate investor watching the real estate boom of early 2000s closely, you could have predicted the foreclosure investing opportunities that would become available today in virtually every real estate market in the country.

In the last two years mortgage lenders have been reporting dramatic increases in defaults and foreclosure rates nationwide causing many sub-prime lenders to go under. But that's just a tip of the iceberg.

Will You Be Able To Capitalize On This Foreclosure Boom?

On the surface it seems easy enough. Get a list of properties in default. Contact homeowners. And get the deal done at a juicy discount, before the bank takes the house. Then you can fix it up and flip it, or keep it as a rental with an instant built-in equity profit. Right?

Well, not quite.

Getting into the foreclosure investing game could be an extremely lucrative move that alone could not only feed your family but pay for lavish lifestyle and vacations. Or it could turn into a big black hole consuming all of your time, energy and marketing dollars.

Very few real estate investors actually succeed in foreclosures on a consistent basis. Why? Because, they're using the wrong approach in a very crowded market.

How Will You Differentiate Yourself in a Crowded Foreclosure Investing Field?

To say it's crowded is a huge understatement. The field of foreclosures is probably the most competitive area of real estate investing. It routinely gets more attention from mass media. So more people flock to pursue it. Hundreds of investors in your metro area are mailing to homeowners facing foreclosure. They're even harassing homeowners on the phone and knocking on doors.

In short, if a homeowner is behind on payments, you can be prepared for a major fight for his attention. Just imagine for a moment that person sitting at his kitchen table plowing through a pile of letters from lawyers, bill collectors and investors.

Your mailing piece is just one of many that goes straight to the garbage can. You must find a way to differentiate yourself from the investment crowds. Here's an idea that will put you ahead of the competition.

The Only Ethical Way To Approach Foreclosure Investing

Truth be told, for most people who are behind on mortgage payments and in danger of losing their home - talking to a real estate investor about selling the home is the very last thing on their mind. They often perceive foreclosure investors as sharks taking advantage of their situation.

So, if you want your phone to ring with people in foreclosure, contact them with an offer to 'keep the home'.

Here are 3 Reasons Why You Should Offer Homeowners Facing Foreclosure the Chance to Keep Their Home, Even if You're Really Interested in Buying it

First, trying to help a family in financial trouble is the ethical thing to do. You'll be preserving the American Dream.

Second, you'll actually make money doing it. You can help them negotiate a repayment plan with their current lender (the process is called Loss Mitigation) and collect a fee for your service. There're several companies nationwide with an in-house list of Loss Mitigation department contacts for literally every lender in the country that will do all the work for you. So, even if you never buy a single home, with tens of thousands of foreclosures in your hometown, offering Loss Mitigation services could turn into a lucrative income stream by itself.

Third, this is the most profitable approach. In many cases you will end up buying the home. Remember, the Loss Mitigation process will only work for those owners who got behind, but now recovered their ability to pay. Most won't qualify for a repayment plan because they can't prove their hardship is behind them. And they won't know it until you helped them to pencil their income and expenses on paper and submit it to their lender. Now they have undeniable proof they can't keep it. Once the reality settles in, they'll start talking 'sale'. Who will they sell to? You, of course. You have now earned their trust and it's the only next natural step to take.

So again I ask you: Will you be able to capitalize on the booming foreclosure market? If you follow my advice, you will be able to profit from foreclosures for the next 5 years or even longer.



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Jeanette Fisher asked:


eginning real estate investors get started by flipping real estate to make quick cash. If you would like to make more money by investing in real estate, you need to know a few essentials.

What is the definition of real estate flipping?

Simple definition: Buying property and reselling quickly, hopefully for a great profit. Usually, people think of flipping houses, or the buying and selling of a home fast, as the only way to make money flipping real estate. However, some investors specialize in other types of real estate such as land or strip centers. Some confusion arises over the process of making money flipping property. People who specialize in finding bargain real estate, obtain a purchase contract, and then sell the contract before taking title to the property are known as "Bird Dogs." These beginning real estate investors get started with no money down by: Finding a seller under stress with a bargain property Securing a sales contract Selling their contract for roughly $500 to $5,000 to a seasoned real estate investor Isn't real estate flipping illegal? Flipping real estate isn't illegal.

However, many unscrupulous investors committed mortgage fraud to make fast money. Some of these investors, working with mortgage brokers and appraisers, resold houses to unqualified buyers inflating the property value and home buyer's qualifications. Often these home purchases had no money or little money down. When these new home owners defaulted on the mortgage payment, the mortgage lenders lost money because the house wasn't worth the inflated purchase price. To avoid legal problems in real estate flipping, don't commit mortgage fraud.

To make money real estate flipping:

1. Prepare your financing so you can close on a deal quickly.

2. Learn your market so you know what makes a good deal.

3. Find a bargain property owned by a seller under stress to sell.

4. Secure a purchase contract in your favor.

5. During escrow, plan your selling actions.

6. Close on the property on time.

7. Immediately set your selling plan into action. If the property needs fixing, be prepared to get this done right away.

8. Market your property to your target market. Don't just list the property and hope for the best.

9. Find a qualified buyer. Have a loan officer check to make sure your buyer meets all the mortgage requirements.

10. Stay legal.

Don't use an inflated appraisal. Don't gift your buyer the down payment. Don't help your buyer create false W2s, write phony credit letters, or prepare any false documents. You can pay many of your buyer's closing costs to make the purchase easier. You can make money flipping real estate.

Buy low, sell for full-market value, avoid mortgage fraud, and enjoy your profits! Copyright © Jeanette J. Fisher

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Mike Kar asked:


Most of us think of properties that have gone into foreclosure as old, beat up places that no one would want to buy.

However, the truth is that in today's unstable economy, more and more gems are going into bank foreclosure simply because the owners of these properties have fallen on hard times. While mortgage lenders work with homeowners for a while to avoid the foreclosure process, eventually those who cannot pay their home loans lose their homes.

Many people realize that they can benefit from foreclosures by buying REO foreclosure properties. REO stands for real estate owned, and these properties are usually owned by the lender that held the mortgages.

When a homeowner cannot pay the mortgage back, the bank will repossess the property, evict the homeowner, and then look to quickly unload the home before losing any more money. Because the lenders goal is to get rid of the property without losing any money, rather than make a huge profit off of it, those who purchase these REO foreclosure properties can often turn them around and sell them for a decent profit.

Is there risk involved with this process? As with any investment opportunity, there is. However, because there is almost always a demand for homes, buying bank foreclosure properties is a fairly solid investment. The trick to making it work is knowing what type of home to buy. Not all foreclosures are going to be easily sold.

If you are stuck sitting on a property for several months, paying a mortgage payment each month, you may lose money on the deal. Certainly you will put yourself in a financial bind for those few months you are holding the property. To successfully invest in bank foreclosures, you must be able to recognize the types of properties that will resell well.

Also, the amount that of equity in the mortgage is important when you are investing in foreclosures. Remember, the banks goal is to avoid losing money on the deal, not making a huge amount of money. Therefore, the bank is going to offer the property for sale at a price that is close to the amount still owed on the mortgage.

For example, if you are interested in purchasing a property that you think will bring $250,000 on the market, but the previous homeowner still owes $230,000 on the mortgage, you are not going to get the home for much less than $250,000. You will not make much money investing in this piece of real estate. However, if you can find a home worth $250,000 that is for sale for $200,000, you will make a nice profit from this sale.

In order to make bank foreclosure investing work, you must know the real estate market in your area and be able to tell the approximate value of a home.

While there is tremendous potential for those interested in investing in REO foreclosure properties, there is also a tremendous amount of competition in this field. Many investors who have a decent amount of capital to use in their investments already have relationships with mortgage lenders.

This means that the lenders alert them to properties before they hit the open market. For this reason, the average real estate investor needs to find these properties before they go into bank foreclosure in order to make a profit. These homes are called pre-foreclosure homes.

The biggest reason that pre-foreclosure homes are the best investment for the new investor is because there is less competition surrounding these homes. Also, the sellers and the bank are generally quite motivated, because selling the home before it goes into bank foreclosure saves everyone both time and money.

Investors are willing to give you their money to work with to purchase these homes because they are usually available for a deep discount.



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