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An Unusual Way to Enter the Real Estate Investing Business: Pre-Foreclosure Real Estate



An Unusual Way to Enter the Real Estate Investing Business: Pre-Foreclosure Real Estate

Real Estate Investing Business, Pre-Forclosure Real EstateBusiness Overview:

It’s no secret that the real estate investing business can be lucrative when done right, and now is the time to learn more about pre-foreclosure real estate. The key word here is “learn” because in this business there is truly a fortune to be made, but there is also a great deal of risk involved.


As a pre-foreclosure real estate investor, you will be purchasing properties either from the owner who cannot afford to make mortgage payments on the property, from the foreclosure auction, or from the lender if they repossessed the property. Often you get a fantastic price for the property, but you get absolutely no guarantee about the property you’re buying. That means no structural inspection and no guarantees that the property isn’t marred by legal problems. Don’t forget, you still need to turn these properties around for a solid sale profit. For these reasons—and many more—you must know what to look for (and what to look out for) when investing in pre-foreclosure real estate.


Beyond the need for a thorough understanding of the business, you will also want to learn more about where to locate these pre-foreclosure properties and everything you can about the neighborhoods where you find them. In this way, this business idea is perfect for hiring employees to keep up with these details while you focus on closing the big deals. Whether you choose to farm out some of the details or do it all yourself, the rewards of this business idea can be extraordinary.


A day in the life of a pre-foreclosure real estate business owner:

It can probably be said that this business has a constant learning curve so much of your free time will be spent keeping up with the changing real estate market. You will want to start each day with a scan of your real estate sources to determine if there will be any pre-foreclosures coming on the market. You will also want to maintain good relationships with any contacts you make in the real estate lending business. Some of these tasks can be delegated to employees, but you will certainly want to be present on days when a sale will go through. Finally, you will want to make sure your own finances are on track to continue your business successfully.


About Your Customers:

In the pre-foreclosure real estate business, you are ultimately the customer. You’re the one buying something, but you can consider the people you deal with customers to a certain extent. These include the property owner who is in pre-foreclosure and the lender who is trying to ensure they get the most money for the property without taking a loss.


What You Need to Start:


  • Some initial investment funds to work with
  • A thorough understanding of the business
  • Contacts to help you find pre-foreclosure properties
  • A lawyer contact for real-estate closing or to answer any questions you might have


The Good:

  • You can make a very good profit on each pre-foreclosure property you buy and sell.
  • You can decide how many property “flips” you want to tackle in any given year.
  • The business is perfect for hiring a few employees to work for you.


The Bad:

  • The amount of information you need to know can be overwhelming.
  • If the deal doesn’t go as planned, you could face a loss.
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