Foreclosure properties are quickly becoming a "visible" way to make money or build your investment portfolio, but what other options are there and is there a better way...with less risk?
In the foreclosure arena, you first need cash, 10% to 25% of purchase price, then hard money may be the only way you can capture the rest of the opportunity. I have no problems with hard money, no problems at all; hard money is a great tool when used the right way. I believe another tool is the process of foreclosure itself, not necessarily meaning buying a property at a foreclosure auction. I believe you can save time, relax a little and capture the moment before the bank gets it! You are helping the bank, the last thing they want is another house sitting on their books. Skip the foreclosure auction all together, and maybe you'll save money too.
Capturing the opportunity for as little cash as possible is the goal; before the bank seizes control of the asset. In my world, a property is worth more money before foreclosure. Because of the "short sale" transaction, your most likely not going to find concrete poured down all of the toilets, or a trashed interior. The owners have not been physically removed from their home; the property has better Mojo. When you work with a Real Estate agent that understands what it means for a bank to foreclose, and he/she talks to the banks, then you have half the battle won. It is possible to get a better deal, before the trusty takes it away; do your homework and everyone gets paid. A real win-win situation.
If you are not sure if your local expert knows what they are doing, ask them to explain the entire process of qualifying short sales, pre-foreclosure and foreclosure. If the deal doesn't pencil out, move onto the next one. Have them describe the costs of using hard money, compared to a regular loan and a short-sale/pre-foreclosure transaction. If the professional studder's, or isn't sure, find someone else to work with.
I would be pleased to show you the in's and out's of these different types of transactions, I think you'll soon understand that there is a lot of money to be made; and you'll understand why many investors are currently taking to much risk.
I look forward to hearing from you.
JonErik Johnson
425-442-2964
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