 |
Foreclosure Investing: How to Do it Without a Huge Investment
Author: Hunter Craig  | Posted: 13-06-2008 | Comments: 0 | Views: 6 | Rating: (52)  (?) 
There are an incredible number of scams that promise you can make huge returns on foreclosure and pre-foreclosure investing without using a cent of your own money. They take the form of supposed "investment clubs," expensive how-to courses, books and e-books.
Unfortunately, the majority of these programs are about making someone else rich, not you. Though it would be great to have confidence that most advertisements involved legitimate, helpful products and services, the reality of human nature forces us to exert caution and weigh any business or investment opportunity before jumping in headlong.
Despite the risks, there are ways to make money on foreclosure investing without risking a large chunk of your own nest-egg, and here's how.
1. Buy a Property with Tenants
A foreclosure or pre-foreclosure property that already has tenants allows you to claim that rental income on your mortgage application. So, if you're applying to a lender for a mortgage loan, that rent will be seen as income and property, both reducing your borrowing rate and increasing your eligibility for a higher mortgage.
You will have to pay closing costs and a down payment, but the rental income will allow you to pay the mortgage until you're able to sell the property for a profit.
2. Find Tenants for the Property
If you have the cash to put a down payment on a foreclosure property and carry it for a few months while you locate good tenants, the potential rental income could pay the mortgage on the property while you wait for the property to appreciate in value. At that time, you can sell it for a profit, all without having to carry the lending costs associated with it.
3. Buying Direct from the Owner
Buying direct from an owner is an option that allows you to take over the deed and the mortgage of the property while retaining the existing owners as tenants. In turn, the owners may engage in a buy-back or rent-to-own program or simply continue as tenants until you decide to sell the home. If your credit is good, you can renegotiate the financing to obtain a lower rate.
Buy-direct and rent-to-own programs are legally tricky, meaning you'll have to invest in quality legal advice, contract preparation and real estate consulting, but you can save big on down payments, purchasing costs and interest.
4. Don't Get Involved in Investment Clubs
Unless you're dealing with trusted family members and very close friends, don't involve yourself in a foreclosure investment club. These supposed money-making ventures seek to pull together small investments to buy foreclosure and pre-foreclosure properties, sell them at a profit and then send the returns to the original investors.
Unfortunately, properties are often never bought, returns are frequently deflated and profits can be heavily skimmed.
If you're considering an investment club strategy, try taking it on with a group of close and well-known friends, and do so with a transparent structure and well-written legal contracts.
Foreclosure investing can be a lucrative business opportunity for the savvy investor who is will to take sufficient time to learn the details and "practice" them before placing huge sums of money at risk and simply hoping for the best.
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/real-estate-articles/foreclosure-investing-how-to-do-it-without-a-huge-investment-448098.html
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
In Florida, does a spouse's name have to appear on ...
By: D | 19-08-2008
In Florida, does a spouse's name have to appear on the judgement when a bank is suing for a foreclosure if the spouse is not on the note? The property is an investment property not there residence.
Can a business buy a condo in which business owners live in?
By: bbemary | 19-08-2008
My husband and I own a business in Massachusetts. We have a part time home in the state of Vermont which we hope to retire to in fifteen years and a home in Mass. We travel back and forth three days in VT, four days in MA. Can we sell our home in MA and have our business buy a condo for us to live in while we work in MA?? In other words can our business own a condo AND would it be an advantage to have our business own our condo????
What is a patriot lien
By: cpindy | 18-08-2008
what is a patriot lien
I am looking in starting a foreclosure maintenance ...
By: tony | 18-08-2008
I am looking in starting a foreclosure maintenance company i want to see if anyone can give me an idea of whats being charge out there for this services.. Thank you
Zoning in Los Angeles: what does LAC2 mean?
By: ginabooyle | 18-08-2008
Zoning in Los Angeles: what does LAC2 mean?
What to do and when to prtect assets.
By: what to do? | 18-08-2008
how long before foreclosure and do you have to go bankrupt to prevent dificeincy judgement.how long does it take for lender to receive judgement. what and and when should you file to protect your homsteded property.
Q&A Powered by: 
Latest Real Estate Articles
The R.E.I. Revolution On The Internet
By: Damian Lanfranchi | 06/10/2008
Understand it and thrive. Ignore it, get left behind. I want to make sure that you truly grasp how the internet is revolutionizing the Real Estate investing world. It's absolutely critical to the success of your business. It's something that a lot of the Real Estate investors and gurus are missing the boat on when it comes to their real estate investing website.
Cyprus Property is Hot! But is it Getting Too Crowded?
By: Steven Clarke | 06/10/2008
The recent interest in Cyprus property has initiated a housing boom on the island. It doesn't matter where you go on the island, you can often hear the sound of construction in the background. Developers are scooping up land at an alarming rate trying to keep pace with the growing...
Dubai Property Strong Fiscal Growth
By: Editor-123 | 06/10/2008
Fiscal growth in Dubai is progressing by leaps and bounds and the real estate market is the major attraction of this place. In Dubai, you can find an endless list of buyers investing in real estate properties that are pocket friendly.
Different Kinds of Apartments and Flats – How to Find One That Suits You
By: aena18 | 06/10/2008
To have a beautiful home is everyone’s dream but in this 21st century to have your own home is not that much easy because now everything is available in high price rate. In this expensive world now, most of the people prefer apartments and flats as their home. Apartments have lots of advantages like there are lots of variety apartments are available in beautiful locations with affordable price rate.
Flower Mound Apartments
By: Alice Shown | 06/10/2008
If you are looking for an apartment as rent or you want to purchase a Flower Mound Apartment. Purchase Flower Mound Apartments in a planned manner. Consider the different factors. Do not take a decision without a planning.
Cedar Hill Apartments
By: Alice Shown | 06/10/2008
Cedar Hill is situated in a suburban area. Highways 169, 7, 394 and 494 can be easily assessed from the place. The building offers all types of facilities and services that can give you a comfortable stay.
The Inner Workings of Interest Rates for Owner Builder Loans
By: Chris Esposito | 06/10/2008
A good owner builder construction loan will have only one closing to cover the land purchase, construction phase, and conversion to your permanent financing. Therefore, the owner builder loan will have two sets of interest rates: one while you build, and one rate for when you move into your new home. Every owner builder should understand the inner workings of these rates when planning to build.
Information of Real Estate
By: rehan | 06/10/2008
Zammen-zaidad and propertycafeteria is a very nice and well portal and all the facilaties related to real esatate and property.
More from Hunter Craig
Foreclosure Investing: What You Need to Know Before Jumping In
By: Hunter Craig | 20/06/2008 | Real Estate
Foreclosure investing involves a lot more than picking up a house for a below market price at an auction and then turning around to sell it for an amazing profit. Foreclosure is a long process, as is real estate, and both are bound by laws and tax regulations that you...
How To Make Money On Pre-Construction Home Investing
By: Hunter Craig | 06/06/2008 | Real Estate
As developers try to raise capital through the building process, they often pre-sell properties, whether condo units or homes, at a discount when compared to the prospected market value. While this can be a great opportunity to get into a property at less than market value, it also carries risks....
Real Estate Investment For Your Retirement
By: Hunter Craig | 31/05/2008 | Real Estate
Real estate investment can be a fantastic way to build equity, gain capital and increase your net worth as you prepare for retirement. To learn more about the different ways real estate investment can help you in your retirement and create income streams, keep reading.
Equity
Acquiring real estate property...
Real Estate Investing: Insider Tips On How It Really Works
By: Hunter Craig | 24/05/2008 | Real Estate
Real estate investing is about more than buying a property for below market value, throwing some paint on the walls, and making tens of thousands of dollars in profit. It's about more than sinking a few thousand dollars into a bogus "investment club" or grabbing a house at a foreclosure...
Foreclosure Investing: What Is It And How Does It Work?
By: Hunter Craig | 17/05/2008 | Real Estate
With the housing market in a downturn and hundreds, if not thousands, of homes going into foreclosure, people are beginning to talk more about and pursue foreclosure investing. But, what is it and how does it work? Well, for answers to your questions on foreclosure investing, keep reading.
What is foreclosure?
Foreclosure...
|
|
Finance 
