My regards to the community, I would be seeking your advice on some matter. I have some interests in real estate and have read that foreclosure is an efficient way to gather up profits. I would like a little more thought on this…as to how does the whole thing work and how can we invest properly in pre-foreclosures to earn secure profits.

Buying foreclosures can be both good and bad.The first question isare you planning on buying foreclosures on the courthouse steps or are you working with a real estate agent to find you deals?
If you're not buying at the courthouse steps and are working with an agent, then keep in mind, every property they will show you are properties that Investors "passed on" at the courthouse. Meaning, they didn't think they were deals so the bank had to take them back.

Yea but the houses realtors show are not the same price that the bank bought them back for. A bank may have had to buy the house back for what they owed on the property and then put it on the market for 50 cents on the dollar. What state are you looking to pick something up in? Some of the best priced foreclosures sell within a couple days of being listed and a lot of times even sell for over asking price.

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Really. So every time a house is taken back by the bank they list at a different price, really. Every time investors pass on a deal at the courthouse, the bank decides, hey lets use a Realtor and ask for less money out of the gate. they do this all the time? really. (thats sarcasm) I deal with banks and foreclosures both on the courthouse steps and as REO and your statement is not entirely accurate. Dont just say that to try and collect a commission and steer some new investor into a bad deal.
the best time to get them is before they're foreclosed.
Thats the best way.

I'd also like to mention that if you can pick up a pre-foreclosure, you can see the inside of the home before buying. This way you really know what you are getting into. You have to be careful if you buy on the steps and have not seen the inside of the home. Make sure you purchase cheap enough and prepare for the worst.

Keep in mind if you purchase on the steps, you will need to buy with cash. Always remember that you make your profit when you buy and realize it when you sell.

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Debbie James, Realtor
Crye-Leike Coastal Realty
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The best way to get them is before they foreclose? That's a pretty broad generalization. When a property forecloses that has mortgage insurance, the lender gets 20% of the loan amount in the proceeds of his mortgage insurance claim. That gets some flexibility right out of the gate.

I had a house that I sold as a listing agent in 2006 for 142,000 with a first time homebuyer financing 97% of the purchase price. When it foreclosed the bank put it on the market (yes...with an agent) for 44,000. Do you think you could have done better in preforeclosure on that one?

This whole thread smells of spam. Hernandez first post and 4Closure's first post. Then Errsher2 comes in to sell us something on your wonderful method of buying preforeclosures?

Please, oh please tell me how to order, I can't wait to buy it! (even more sarcasm)

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Dan Connolly
Atlanta Georgia
Atlanta Georgia Real Estate
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Dan is on fire with these "one post wonders"!!!!!!!!!!!!!!!!!!!!!!!

E-hem... where are the moderators?

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Matt Pellerin - Phoenix Homes Team Leader
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Yeah, I'm wondering that too.

Dan, how often do you see that happen????? Because if that's an every day thing, I want to know where to buy the homes. And what kind of neighborhood? My husband and I always judged where we would buy houses if I felt safe driving thru the area, at night, by myself. That's just a great deal for someone. Congratulations.

Just because I'm suggesting to purchase a home pre-foreclosure, doesn't mean the numbers will be right. Yes, some banks will take a SHORT SALE! Ya, know where the investor negotiates paying the bank less than what they owe. Or what about Subject-to??? Yes, all scenarios depend on the numbers. Don't really understand why you are getting your panties in a wad...no one is spamming on this particular thread. Just trying to help a new investor understand...

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Debbie James, Realtor
Crye-Leike Coastal Realty
850-450-2000 cell
Get Lots Of Real Estate Referrals
Emerald Coast Florida Real Estate

Stay In Touch With Customers

Okaloosa, Walton & Bay County Florida Real Estate

You are correct about the best deals being before they are foreclosed. But, you act as though the best deals are at the court house steps and this is just not the case. For more than one reason, first you are unable to see the interior in most cases and so do not no the full extent of damages. Second, most of the homes going into foreclosure are leveraged to the hilt and so the bank ends up buying them at near and sometimes above the current market value for the property. Thirdly, those few properties at the court house steps that don't get purchased by the lender have dozens of competing investors and so get driven up to where if you make even a small error in your estimation of value or there are problems with the property you were unable to detect you frequently will end up on the loosing side. The real deals are prior to reaching the steps shortly after the owner gets their letter of default.