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Actually Considered Foreclosure Investment
While many saw the 2011 Foreclosure Crisis as a bad thing, there were those who saw a silver coating on that large gray cloud. These were the people who saw that with so many foreclosures, there was a big chance of foreclosure investment. This past year offers seen a boom in foreclosure investing, and many people have made lots of money doing it.
Foreclosure investing is purchasing a home that has gone into foreclosure because the borrower was no longer able to afford their home. Depending on the state and the kind of foreclosure, the sale of the home may go through a trustee or through the courts. When the home is sold through foreclosure, the money from the sale is used to satisfy all of those other mortgage. Sadly, for the lender, this usually means getting under what the home was worth, but it is better than getting nothing at all. For an investor, foreclosure properties present an excellent opportunity to buy a house for next to absolutely nothing. During 2011, many homes that were once valued over $400, 000, were now selling with regard to $100, 000. That meant that purchase buying homes and wholesaling them, or flipping and promoting them, an investor could make thousands and thousands of dollars on the home by holding onto it before market improved.
The Stages of Foreclosure To be a foreclosures investor, you need to know the stages of foreclosures. It all begins once the homeowner cannot make their loan payment. Usually it will take three months of missed payments before the bank starts the process. Even at this point, the bank will try and work with the homeowner with new payment schedules along with a lower interest rate. If this fails, then the homeowner gets a summons using their creditors. The papers are also filed using the county clerk and become a part of public record. Once this happens, the homeowner has a limited period of time to pay what these people owe. They have to spend the outstanding loan quantity, sell the home, or make a cope with their creditors. If none of these happen, then the home is set up for foreclosure sale. At this point, if no one buys the home that has gone in to foreclosure, the home goes to the lender and the home because a real estate owned property. By waiting until this stage, the foreclosure investor can get the property for a smaller amount. If the real estate investor buys when the home is in a foreclosure sale, or before, they will pay less than what the home may be worth but more than if they wait until the home because a real estate owned home.
Going through a foreclosure is a terrible thing for most people. It is unfortunate that it happens but it often is really because people borrow more than they can afford. Of course, the most common cause of foreclosure is divorce, followed by a failed business. Either way, as a foreclosure investor, you can make lots of money in a very hard financial time.
