Some of the best and most profitable real estate investments are accomplished by buying below real value. There are many ways to obtain a property below value. And, remember: not only are you helping yourself get a good deal, you will also be helping the homeowner out of a difficult situation.
Two of the best situations in which to make this happen are the pre-foreclosure and short sale deals. But to make these deals work, you need to have all your ducks lined up in a row; there are things you have to know before you make an offer.
Whether or not a property will be a good pre-foreclosure or short sale investment will not be immediately apparent when you first look at a property. Something to consider is that you may not have the luxury of an extended timeline as with an outright sale.
Many times the homeowner is already behind in payments and the mortgage lender has already begun foreclosure proceedings. This means you will usually be on a tight deadline. It's very important that you keep your timeline in mind when preparing an offer.
Certain things like title checks and inspections must be done. You must estimate the costs of any repairs that need to be done and determine whether the property will still be beneficial for you to own or "flip" after repairs and remodeling. You'll need to get a Comparative Market Analysis and determine the Capitalization Rate, to assess net rental income, if you're planning to rent the property. Depending on how far along the foreclosure process is, you may not have enough time to get everything done and help the homeowner before the bank forecloses.
Still, there hasn't been a better time in history to work with pre-foreclosures and short sales. Foreclosures are at an all time high. Mortgage lenders are desperate to reduce their inventory of real estate. Lenders are in the business of loaning money. They do not wish to be owners of real estate. They'll leave that to you.
Becoming a successful real estate investor will take many hours of your time, but remember: Investing in real estate has created great fortunes and successful retirements for many men and women.
And now, I'd like to invite you to find all the step-by-step details about how to evaluate potential pre-foreclosure and short sale properties, make the necessary calculations, and prepare required documents in "Real Estate Investing."
Claim your copy today at http://CarlylePublishing.com and get instant access to everything you need to become a successful real estate investor.
I'm Henry Behrens, real estate investor and author of "Real Estate Investing."
Article Source: http://EzineArticles.com/?expert=Henry_W._Behrens
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