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Yes the real estate market is still spiralling down out of control. Yes mortgage lenders have loaned their way into a ton of trouble. Yes people are loosing their homes all over the country because they can no longer afford that mortgage. Yes this all sounds terrible and it does not look like there will be a reversal of fortunes anytime soon.
There is however a very small percentage of people out there that are loving the state of housing market right now. Those people are doing what is called short sale foreclosure investing. This type of investing can be very lucrative especially in times like these when foreclosures are happening all over the country. You could say for the smart investors it would be like shooting fish in a barrel. Now this is not to say that this type of investing is an easy investment to pull off. Short sale investing in real estate can be quite tricky actually and for those that do not know the ropes this type of investing can get really costly very quickly.
So what is a short sale real estate investment? Well here is the basic way this works. You the investor are looking for people that are going into the foreclosure process because they can no longer afford to make the payments. You approach the lender and with a broker price opinion this is basically a purchase package that you sell to the bank/lender. Why do they like these? Even though you are offering a considerably lower price than what the mortgage is worth, you are actually going to be saving them money. The cost of going through a foreclosure process than having ownership of a property they don’t want and may take them months to resell. Believe the banks/lenders don’t want your property any more than you want to loose it.
Then what happens is you purchase that property at well below market value price then turn around and sell it for more than what you purchased but still less than market value which increases your odds of a quick turn around and a nice profit in your pocket.
So that is the quick and sounds like a great and easy investment. Of course in reality it’s not as easy as it was explained and for sure there are tons of pitfalls that if you are not careful can put your wallet in a world of hurt. The best way to learn this type of investment is to find a person that has been and still is doing this type of investing. Volunteer your time to do the grunt work for them in order to learn the real ins and outs. The knowledge that person can pass on to you will be worth a lot of money in your future, of course the trick is to find that person that is really good and willing to teach you.
