Foreclosures and Wholesale

A foreclosed home could offer a lot, so check out discounted foreclosed homes. According to the National Association of Realtors, there will be more than 1 million foreclosures in the next two years. Before you consider buying property in the foreclosure market, make sure you do your homework. Buying a home in foreclosure can be easy, but it’s not without risk. (You may want to consider using a reverse mortgage product to finance your real estate investments.)

You can usually buy one through the state process. It usually takes place at the local courthouse in the clerk’s office or in front of the foreclosed home. Buying a property at auction probably represents the highest potential return, but also the most risky.

You might consider buying a home before foreclosure. You can find a house before foreclosure by studying the public notices about houses in default. Information is available from Internet companies such as Home Foreclosures.com, HomeForeclosure.com, and RealtyTrac.com. However, you will pay a fee for their services.

There probably won’t be much competition, if any, because the house is usually not for sale. It’s a private deal. You offer a price below market value but above the amount owed on the bank loan. What makes it hard for people is the idea of ​​approaching an owner who hasn’t put up a record for sale yet.

One of the best ways to make a deal is by buying a property wholesale and selling it at retail. The idea of ​​flipping isn’t very popular these days, but in essence, that’s what wholesaling is. All you are doing is buying at a discounted price and then reselling it in a short amount of time. There are different types of people involved in wholesale such as explorers, distributors, and retailers. If you need cash to finance your project, you might consider refinancing your mortgage.

A scout dog or bird, so to speak, is someone who collects information, locates potential businesses, and then sells the information to other investors. When you become an explorer, very little knowledge or money will be required. The explorer will locate distressed properties, collect the information, and then present it to another investor for a fee. An explorer is paid $500 to $2000 for each lead they provide to an investor, depending on the price of the property and the potential profit.

A dealer will locate a distressed property and sign a contract with the owner. Dealers sometimes buy properties at wholesale and then sell them at retail or sell the contract to another investor. Being a dealer is riskier than being a scout because dealers put up their own money to secure the deal. A tradesman does not have to deal with tenants and can earn more without having to fix up the property.

What a retailer does is buy properties from dealers. Retailers fix up properties using their own money, thus taking the most risk, but also making the most profit.