Smart investors find opportunities in every situation, be it good or bad. A foreclosure is a terrible situation for a homeowner; however, as an investor; there are several ways in which this misfortune can benefit you. Many investors miss on deals for lack of knowledge and the notion that the foreclosure process is complex and hard to crack. However, there is only one secret for benefitting from a foreclosure; being knowledgeable of the stage where the homeowner is at and acting from that point. This strategy can be used by a loan modification professional, a realtor or any investor in the real estate market.
- Buy at a Foreclosure Auction
This is normally the most common strategy that investors use, even though it should be the last option. Making profit at the auction necessitates that you have partners or a buyer ready to buy the property. You should act carefully when facing a foreclosure to avoid making a bid that’s too large, resulting in a loss.
- Deed In Lieu of Foreclosure
This is a situation where a homeowner volunteers to hand over the house to the bank before the bank is compelled to foreclose on it. After the homeowner surrenders the property, they simply move out. Most creditors also don’t like the entire complex and cumbersome foreclosure process. For this reason, the lender will be willing to pay the homeowner even up to $1000 to convince them to surrender and move out of the property.
- Stop foreclosure services
As an investor, you can benefit from helping a homeowner retain their home if the temporary situation, say job loss that was deterring them from financing their mortgage loan, has been solved. You can help the homeowner stop the foreclosure process by negotiating a forbearance or loan modification with their lender. You can charge the homeowner for your services by acting as their loan modification professional.
There are a lot of secret strategies that an investor can use to profit from a foreclosure. The more strategies you have mastered, the more the deals you will be able to close and consequently the higher profit you will make.