Investor Opportunites with Foreclosures

The foreclosure process presents numerous opportunities for investors to acquire real estate at significant discounts. From the no cash, no credit deals touted on late night TV, to billion dollar bulk purchases. These opportunities can be grouped by the 3 basic stages of foreclosure:


Properties that are in foreclosure but have not yet been foreclosed upon, represent an opportunity to work directly with the property owner. At this stage, more is owed on the many properties than they are now worth. These underwater, or short sale properties, can still represent an opportunity; by working with the bank, as well as the owner, to secure a discount from the amount owed. This can be a win-win solution, by allowing the bank to avoid having to foreclose, allowing the owner to move on without a foreclosure on their record, and a great deal for the patient investor. Not all preforeclosures are short sales, and those with equity present an even greater opportunity.


Buying at the foreclosure auctions is one of the riskiest, and most rewarding, foreclosure opportunities. Buying at auction typically requires foregoing inspections, title insurance, and financing; and may even require you to evict the prior owner or tenant. But these hurdles lower competition, and therefore present far better discounts to those that can overcome them.

Bank Owned and REO

Banks are taking back thousands of homes through the foreclosure process every month. These homes will be listed for sale, or occasionally sold in bulk. These properties are often not fixed up after foreclosure, and therefore can represent a bargain for investors willing to buy diamonds in the rough. There are also times when banks need to quickly dump properties, to raise cash to meet reserve requirements. Further, banks often use out of the area real estate agents that might not realize the value of the property, and mis-price it. For these reasons and more, REO properties provide significant opportunities for savvy investors.


<<<Back To Foreclosure Library


Courtesy of Sonata Realty