An entrepreneur can operate in the real estate market in a variety of ways and pre-foreclosures are one of the preferred options. The Investor can buy real estate and then resell it at a higher price or he/she can bring buyer and a seller together and earn 4-6% commission on closing deal. The earnings depend on number of properties one can turn over in minimum time frame. Real estate in general and dealing in pre-foreclosures is one of the most profitable home business opportunities. Real estate investing is the perennial wealth builder. 

Transition from nine to five job to a real estate entrepreneur can be incredibly satisfying in terms of financial gain in flexible time schedule. Real estate business may look very daunting from the outside but once you get the nitty-gritty of it, there can be no business as profitable as this. It requires no big budget, no perfect bank credit or huge bank balance. There is no specific formal education requirement, nor any prior experience needed to start on. You just need an eye to identify the property and work on it to make it attractive to the potential customers to swing the deal. Moreover, if you specialize in pre-foreclosures, you job get much more easier. 

Investing in Pre-Foreclosure market
It is very easy to start on the real estate business by purchasing houses going cheap in the pre-foreclosures market. Pre-foreclosure houses are the houses in the default phase of foreclosure; where the bank has filed initial foreclosure papers but the sheriff sale or trustee sale where bank auctions off the property, or repossesses it if no one buys at the auction, has not occurred yet. Purchasing the house during the pre-foreclosures period is one of the best ways for anyone to get involved in real estate investing. You can buy the house at a substantial discount, re-do it with extra’s, get the documents in order then resell it in retail. This deal will fetch you an unbelievable handsome profit. The reason for this huge profit in pre foreclosures is due to various reasons. Some of the reasons are listed below: 

1. Some people default on their mortgage due to variety of reasons and stop making payments to the bank for their loans. Then you step in, negotiate with the seller and the bank, right up until the point where you buy. Till then no body is making the payments. For a novice investors worried about the holding costs, investment in pre-foreclosures proves to be big advantage.

2. Pre-foreclosures are a very well defined niche market. Instead of going in for each and every property, just focus on target high-end property. Develop focused marketing campaigns and standardized processes to get deals completed and closed in one go.

3. The fundamental principle of real estate investing is contacting and negotiating with the motivated sellers only. Avoid the speculators till their mind is made for selling. Sellers in the pre-foreclosures market are the most motivated ones, for they are in the process of losing their house due to loan defaults and lack of funds. They just want to sell and have the bank off their back. By purchasing from the people in this stage, creates 30% or more equity spreads on houses often in good condition is very easy to do.

4. Buying pre-foreclosures houses enables you to create large equity spreads. The rising economic uncertainty causes a lot of foreclosures. If banks had to take back all of the foreclosure properties, the FDIC would shut them down. So even they shy of it. By requesting the lender discount on what is owed on their payoff, large spreads of equity can be created on default loan payment houses.

5. Lenders, mainly banks, are under pressure to liquidate bad loans rather than take the property back. Thus large discounts can be negotiated during pre-foreclosures. Once you become familiar with this process, over the period of time you learn to hone your negotiating skills for still larger loan repayment discounts.

6. Buying houses in pre-foreclosures allows you to simply take over the existing finances, so no qualifying needed. You can take title to the property in a land trust and start making the pre-existing mortgage payments. The biggest advantage is that you get all tax advantages, appreciation, depreciation without any risk of being personally liable for mortgage and the property.

7. Be alert to pre-foreclosures properties and buy them before they go in for the auction. There is not only too much competition for property bidding at the auction but also unscrupulous elements, which are ever-present to upstage your bid. Also, at the property auction you need a hefty bank balance or ready cash to pick up property at once.

Real estate investing makes for a profitable business proposition. It is easy to buy a property cheap at the pre-foreclosures stage. It not only reaps in huge profits but also helps the seller out of difficult loan repayments.

 

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