Nationwide increase in foreclosures is earning short sale investors record profits even in the current slow real estate market.
With an unprecedented number of foreclosures sweeping the nation, there has never been a more lucrative opportunity for real estate investors. Specifically, there is an overwhelming number of homes being returned back to the bank because the homeowners can no longer afford the monthly payments, causing the current mortgage meltdown.
The most successful strategy in the current real estate market that helps all parties involved is the short sale. With a short sale, the bank agrees to takes less than the full amount owed on a mortgage that is currently facing foreclosure. When done correctly, the short sale creates a win win win opportunity for everyone involved: The bank, the homeowner, and the investor.
The bank wins by taking a discount on the mortgage rather than spending months being trapped in the foreclosure process. They get some money now, rather than going through the time and hassle of selling the house. The homeowner wins as they get out of a mortgage that they can no longer afford without going into bankruptcy and hurting their credit rating. And of course, the investor wins by selling the house and making a substantial profit.
Dr. Larry Litman, successful foreclosure investor and co author of the Foreclosure Success Guide, explains, I ve personally picked up houses that were facing foreclosure for $60,000 with a short sale, then I was able to turn around and sell it for as much as $80,000 just a few weeks later. That s $20,000 of profit for just five to seven hours of work
However, without the right system, these short sale deals can fall apart before they even start. Working with the bank to complete a successful short sale is rather difficult without the right strategies.
Dr. Litman s son and business partner, Mike Litman explains, You ve got to have a proven system and do it right to get those kind of results. The fact is there have been a lot of people entering the foreclosure market without the right plan, and they got burned. We ve made our share of mistakes along the way, and we want to help people avoid making these same costly errors. The foreclosure epidemic is a great opportunity for those who are properly informed.
A successful short sale investment involves several critical steps. First the investor must find qualified leads, usually homeowners who are facing preforeclosure. This means that they are behind on their mortgage payments, and the bank will soon begin the foreclosure process and seize their house.
Next, the investor negotiates the purchase price with the bank. In a short sale, the investor offers the lender less than the full amount of the mortgage, but because the homeowners can no longer make any payments at all, banks will often sell these houses at a discount. The negotiation process involves putting together a short sale package and getting a broker s price opinion (BPO).
Finally, the short sale investor must sell the house for more than the price the bank negotiated for it. The amount that the investor sells the house for above what they bought it for from the bank is pure profit. With the huge number of foreclosures banks are dealing with, it is common for foreclosure investors to earn $10,000 for each short sale deal they do.
While the overall process is simple, there are several pitfalls along the way that may prove to be costly mistakes for novice real estate investors.
To help beginner investors avoid these errors, the Litmans have released a step by step walkthrough titled The Foreclosure Success Guide which offers foreclosure investors strategies on finding preforeclosure leads in their area, negotiating with the bank, and selling the house for a profit.
The guide also offers advice on automating the entire process, which the Litmans say takes only five hours of actual work from start to finish.
These foreclosure investing strategies have only be found in expensive real estate training courses and seminars until now. The new report called the Foreclosure Success Guide can be downloaded entirely for free at http://www.foreclosuresuccessguide.com.
Author Resource:-
Dr. Larry Litman is a dentist in Champaign, IL where he still practices three days per week. During the past two years, Larry and his two sons have been heavily involved in foreclosure short sale investing, where they have made over $783,000. For more visit http://www.foreclosuresuccessguide.com
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