| |
| |
|
|
Real Estate |
|
Cashing Out of Preforeclosures - Exit Strategies for Maximum Profit
One of the quickest ways to real estate profits is through preforeclosures. What is a preforeclosure, exactly? A preforeclosure takes place from the time the bank gives notice of default to the time the house sells at auction. Typically, this is around the time of 90 days into default, depending on state law. The key to preforeclosure investing is equity - the difference between what a house will sell for and what is owed on the house. Preforeclosures allow you to buy a house for less than fair market value, creating immediate equity for yourself. Preforeclosures are your opportunity to buy low and sell high, maximizing your profit quickly. How can you cash in on preforeclosures and exit with the maximum profit? Here's how to do it. Step 1. Find and Secure the Preforeclosure You must submit a written contract directly to the owners in order to buy a preforeclosure, since the property still belongs to them during this stage. Ads in newspapers and subscriptions to preforeclosure listings will help you locate the properties. (See more about this in article 1.) Once you've located a property, you'll need to do the following to screen them and prequalify your homeowners: · Find out all you can about the physical and financial details of the property. (Are there liens? Loan balances? Major repairs needed?) · Gather correspondence from the lender(s) that will fill in the details the owners may not be fully aware of or may not full understand. · Meet with the homeowner at their property and have them sign the documents that place you complete control of the house.* Make sure that you know who ALL the owners are, and that are serious about selling before you start negotiating a deal. * Note: Do this quickly once you have decided you are interested in the property as a solid real estate investment. This will help you turn around your equity quickly! Once you establish that you are there to help the homeowners, you can make a reasonable offer that will that will help you achieve the profit you're looking for. Step 2: Begin Your Pre-Sale Marketing One of the most important steps in securing your preforeclosure is to begin marketing as soon as you have your paperwork in order. It's time to cash in on your equity. Here's how to get started: Stake your claim - literally. You're going to need a heavy supply of signs. Once your paperwork is in order, take a picture of the front of the property. You'll want to keep some "For Sale by Owner" signs in the back of your car and have them ready once you have finished your meeting with the owner. You may want to put out a "Rent to Own," sign as well. Play real estate agent - put signs around the neighborhood with arrows leading to the property for sale. Place your ads -- begin prospecting. Place ads similar to the signs in local newspapers. Expect a good influx of phone calls. When the phone rings, find out if the prospective buyer is an investor or a prospective occupant. Collect the caller's email address, phone number, and fax number. You'll begin your own list of investors this way, and you can notify them of properties you're selling in the future as well. Real estate agents will also call in based on your newspaper ads. Step 3: Screen your buyers - and make the sale. Be carefully when you screen potential buyers for your preforeclosure. Let them know that they'll need to be flexible, patient, and, of course, financially qualified! Make certain they know the home is being sold as-is condition. Once the paperwork has been approved, they'll have to close quickly, usually within 30 days. If you haven't received an offer that meets your standards, it's time to move forward with the auction. Many preforeclosures reenter the market through auctions. You can hold the auction yourself or use a professional company to auction the property for you. It's best when starting out to get the advice of two different auction companies. They'll be happy to give you advice on whether the property would be a good property to auction off or not, based on the asking price. The main advantage of professional auctions is the fact that they will do all of the marketing and auction announcements. You can let them handle the auction details, including screening of the buyers. If you don't get the reserve price you're seeking, you simply pay a fee to them to help cover their cost. If your property doesn't sell on the first try, you can retry the auction again at a later time while you work on unloading other properties. Just remember to keep your prospect list growing as you advertise other properties, and soon enough, you'll have a healthy list of prospects vying for your investments. Once you've sold enough preforeclosures, investors will begin to contact you based on past sales and word of mouth. All of your hard work can help you increase your investments and quickly cash in on your newfound wealth - equity! Richard Odessey along with his wife Michelle are founders of the premier site on the internet - http://www.InvestorWealth.com for training and teaching real estate investors to do high profit deals. They offer regular Free Teleseminars by the top real estate investors in the country and offer how-to tools and kits like the Deal Evaluation Tool (http://www.1shoppingcart.com/app/adtrack.asp?AdID=143414) to help investors to faster and greater real estate success. They also offer 4-8 hands-on training seminars with personal advice from experts that investors can take from the comfort of their home. Richard and Michelle have been investing for over 5 years and personally teach and mentor other investors. This article may be reproduced in its entirety only if unaltered and the resource box is included.
MORE RESOURCES:
Real-Estate - Google News |
|
|
|
RELATED ARTICLES
Salt Lake City Real Estate From the mountains to the valley, there are many types of Salt Lake City real estate to choose from.Cabins:Cabins nestled into the mountains on the east side of the Salt Lake Valley are a great place to escape for those who have a home in the valley (or nearby). Before You Buy A House - Top 10 Tips There are serveral things you need to think about and check on before you buy a house. Even looking at so many houses can be confusing. Real Estate Problem Solver IntroductionThere are many areas one can invest in. Since I was 15 years old I have looked for the fastest, most effective way to accumulate a lot of wealth, with the least amount of risk. Homebuyer Heaven Can't Possibly Last With interest rates at record lows over the past year, there's really only one way for them to go, the only question is when. Most experts agree that rates will remain fairly stable in the short term, at least until the end of the year, and some believe they will even decrease slightly. Customer Service - The Real Estate Revolution Traditionally, real estate has been viewed as a sales industry. But perceptions are changing. Personal Branding Techniques for Real Estate Agents and Brokers Branding can be done to any product, or any person. Before undertaking an exercise in personal branding, however, consider your distinctive strengths and abilities and what they offer the market place. Real Estate Professional in the Palm of Your Hand GETTING THE MOST FOR THE LEASE-TRACKING YOUR REAL ESTATEIf you own rentals and/or investment properties, you know that you have to keep track of your portfolio, maintenance profiles, property managers, and related financial matters. There are a multitude of programs for the Palm-Pilot system to keep up with lease dates, lease expirations, and rent due dates. Tax Free Exchanges: Watch out for the New Residence Rules On October 22, 2004, President Bush signed tax legislation that contained a provision affecting Internal Revenue Code section 1031 (the like-kind tax-free exchange rules).Under this new provision a taxpayer who exchanges under Internal Revenue Code section 1031 into a rental house as a replacement property for a previous investor property and later converts it to his or her primary residence, is not allowed to exclude gain under the principal residence exclusion rules of Internal Revenue Code section 121, unless he/she sells the property at least five years from the date of its acquisition. Property Investment - What Future For the Biggest Bubble of All Time? The Economist magazine published a special report in this months issue entitled "House Prices ? After The Fall". Some might call it pessimistic, alarmist, nonsense or worse but only the foolish would choose to ignore the research that comes out of a think-tank with the kind of resources that this highly respected publication has. Staging Homes for Top-Dollar Sales Wouldn't it be nice to have Roger Hazard's design team from "Sell This House" come visit for a weekend?Many "redecorators" and designers offer "Staging Homes" services from $250 to $5,000. These services usually give good advice, some help with the actual work involved, and others even move in new furniture for you. Should I Invest in Real Estate While Running an Internet Business? Of course you should. I practice this for quite a while and I never looked back. Creative Real Estate Investing With a job that paid $3.40 an hour, I saved $5,000. Evil Gains Entry When we open our doors to strangers, we can never be certain what malice an outsider might bring in. Police officers tell us to keep our doors locked with good reason. Successful Real Estate Investing One of the best roads to wealth in America has always been the acclimation and development of good, solid, income-producing real estate. Real estate ownership is one of the best ways to achieve financial independence for the average person. Selling Your Home? A Warning About Attachments Before you list you home for sale, determine what you don't want to leave behind.Our friends sold their home for full price and moved out a few days before closing. Selling Your House - $100,000 Pets Is your pet worth $100,000? It may be if you don't make accommodations for it when selling your home.A Hundred Thousand Dollar Pet?A house I'd seen with a potential buyer in an attractive neighborhood built around two lakes sold for $100,000 less than was typical for the neighborhood. Cant Rent a Work Zone So you've picked up your first (or third, or tenth) income property, and it's a real fixer-upper. You've got a great team of contractors, and you know what they need to do and how much time and money it's going to cost to make it happen. How To Get Started In Preconstruction Investing? Through our website the most common question that we receive is "How do I get rapidly started in preconstruction investing". Realistically, you only need to take three steps on your path from being a "beginner" preconstruction investor to one that is extremely savvy. For Sale By Owner - Use This Tip To Sell Your Home Quicker and At a Better Price Your house is for sale by owner (fsbo), Along with columns of countless other FSBO's in the Sunday paper. This one little trick will enable you to have your Ad Noticed by more potential buyers. Sell Your Home Without a Realtor and Save Thousand$$$ A typical real estate commission on a $234,000 home (national median price for all existing homes as of July 2005) is over $16,000. In many areas the cut a real estate broker gets is much higher.
|
||||||||||||||