Where do most investors turn to when they seek preforeclosure opportunities? Sure, they take a look at free foreclosure listings or even sources of foreclosure listings that they pay for. While these sources may lead to productive and profitable deals, they also require extensive marketing and business promotion in order for an investor to tap into these preforeclosure opportunities.
Exploring Real Estate Options
When real estate investors evaluate their options for what types of properties to invest in, some of the first things that come to mind are preforeclosure, short sales, and other types of foreclosure properties. This tendency is a natural one.
What other options do investors have? Well, in today’s market, more and more realtors are marketing properties as short sales in the MLS. While these do represent preforeclosure opportunities, it can also be risky for the investor because many real estate agents are pretty new to the foreclosure world (and thus may just be learning what is a short sale) and you are taking a chance that the agent in charge of the deal, is capable.
A significant but often overlooked option available to investors concerns bank foreclosures. This umbrella term includes REO properties and HUD homes but it all ties in with the REO process, the phase of foreclosure that follows the auction and where a lender must then sell the foreclosures in their inventory.
Many investors shy away from REO properties or HUD homes because they feel they have less negotiating power or simply lack the capital to make aggressive offers and play along with the rules that REO lenders stipulate, but this doesn’t always have to be the case. If your financials are in order and you have a solid plan to make the most profit, this may be a good option for you.
There are indeed deals to be found within the realm of REO properties. The offer process in many ways is less complicated, there is little to no emotion on the part of the seller (the REO lender), and deals can be completed much more quickly.
In closing, the entirety of the foreclosure process is ripe with deals that are there for the picking. As rigid as REO properties or HUD homes may seem, the REO process is as much as part of foreclosures as the preforeclosure side of the business. Don’t limit your scope!