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Copyright © 2006 by
Bob Schwartz
San Diego
real estate broker
Certified
Residential Specialist
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Foreclosure Profit Secrets Revealed
Though bigger numbers of foreclosures is very sad for Americans across
the country, investors will be making bank in the real estate market if they
act now and stay committed in the long run.
A home becomes foreclosed upon once the owner is unable to meet their
scheduled monthly payments. Many mortgage and real estate analysts believe
the recent gush of foreclosed homes is a result of adjustable rate
mortgages, or “sub-prime” mortgage loans. An adjustable rate mortgage
periodically “adjusts” the interest rate which in turn causes the home
owners monthly payments to increase.
Whatever the cause that the homeowner is unable to make their usual
scheduled payment, the lender has the right to seize the home and sell it
off in order to pay all outstanding debts. The lender who seizes the
property is typically desperate to sell after all, the mortgage debt may
have sat unpaid and collecting interest for many months or even years. Many
times the lender simply places the seized home on the auction block and
sells it off to the highest bidder.
Foreclosures have always denoted profits to investors but today’s
foreclosure market is the biggest it has ever been in American history. The
opportunity to purchase a home at a bargain basement price has never been
more possible. It may surprise many that the selection of foreclosed homes
stretches across all price ranges and conditions and even includes income
producing properties. It is not uncommon for a multi-unit apartment complex
to reach the auction block.
Many foreclosed homes up for auction will even include faultless, elegant
homes with extraordinary disparities between the auction price and the real
market value. Although such homes are rare finds, a single such home can
earn investors hundreds of thousands of dollars. In short, a single pristine
home purchased by an investor and resold can provide enough investment
income for an entire year!
Aside from what television and radio ads might say, foreclosed homes do not
offer a get rich quick method. Although pristine homes with low auction
prices may provide enough income for an entire year, they may take an entire
year to find. With a little patience and research, investors willing to work
hard can learn the ropes of the foreclosure market and discover how to avoid
common mistakes.
It’s important to understand that information relevant to foreclosure
investments, particularly “lists” of foreclosed homes, provides foreclosure
information that is unreservedly available to the public. While foreclosed
homes certainly do provide a fantastic opportunities for investors, do not
let the potential profits cloud your judgment. Consider joining a real
estate investment club in your area or even an online forum for real estate
investors. A community of real estate investors will lead you to the
information you need to succeed.
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