Home Foreclosure Investing-Learning the Secrets-How I Created A Second Income Stream

Dorothy M. Neddermeyer, PhD
 


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The majority of investors seldom think of real estate foreclosure investing as the highly profitable investment that it is. Why, because most people don’t have the time to learn the secrets or do the leg work to find properties in foreclosure, or they are reluctant to trust foreclosure investing advertisements —foreclosure auctions or sales through lenders.

RealtyTrac™ (www.realtytrac.com), the leading online marketplace for foreclosure properties, released its May 2006 report—Colorado, Georgia, Texas post highest rates. U. S. Foreclosure Market Report shows 92,746 properties nationwide entering some stage of foreclosure during the month, an increase of less than 2 percent from April 2006, but still a 28 percent increase from May 2005. Report results indicate a national foreclosure rate of one foreclosure filing for every 1,247 U. S. households during the month. RealtyTrac publishes the largest and most comprehensive national database of pre-foreclosure and foreclosure properties, with more than 600,000 properties from more than 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate, AOL Real Estate and Knight Ridder Online.

Currently there are 13,318 pre-foreclosure properties in Maricopa County reported by RealtyTrac™. Seventy-five percent of these homeowners will avoid foreclosure. How? They will be saved by Pre-foreclosure real estate investors, the investor, who understands foreclosure investing secrets.

Experts predict foreclosures will increase nationwide in the coming months if the rate of home appreciation remains slow. This foreclosure prediction is the same in every area of the country. The economy is slowing, people are losing jobs and they can't keep up with mortgage payments. Tens of thousands are in the first stage of losing their homes—pre-foreclosure!

There are three stages to buy a foreclosure property:

  • Pre-foreclosure
  • Foreclosure auction
  • Buying from the lender after the foreclosure sale

  • A fourth investment opportunity is reinstating the home owner’s loan. A licensed real estate agent, who specializes in foreclosure investments, develops relationships with investors, thus when a home is in Pre-foreclosure, the agent turns to these investors, if the loan can be reinstated. Reinstating the home owner’s loan usually requires several thousands dollars. However, this type of home foreclosure investing can be part of your portfolio, if you know the secrets or you have developed a good relationship with foreclosure realtors.

    Receiving a foreclosure notice, does not mean a homeowner will automatically lose their home. Real estate appreciation has allowed many homeowners to pull out their increased equity to pay what they owe or to sell the home and pay off the loan, avoiding a foreclosure battle. Those who have already refinanced or used a home equity loan and spent the money or there isn’t enough equity, do not have a hedge against foreclosure. It is, also, predicted that many homeowners with ARM loans face a difficult refinance picture.

    The Mortgage Bankers Association of Arizona reports nearly 40 percent of all home loans in metropolitan Phoenix are adjustable. Nationally, about 30 percent of all mortgages are ARMs. Mortgage Bankers Association of Arizona reports, the number of subprime ARMs jumped by 50 percent in the state last year, making the situation potentially worse for Arizona's housing market. The Subprime loans, which carry high interest rates, typically are taken out by borrowers with poor credit histories.

    "Record numbers of people lured by low initial teaser rates have taken out adjustable-rate mortgages that are putting them in vulnerable positions as rates rise, " said Jay Luber, a vice president with First Horizon Home Loans in Phoenix.

    This creates a perfect opportunity for the informed real estate investor to come to the rescue of the distressed homeowner, and at the same time make a good return on their investment.

    It's a win-win proposition. You, the real estate investor, can help the homeowner save their credit and make a nice profit at the same time. This is called Pre-foreclosure real estate investing. “Pre-foreclosure is where the most return on the investment can be made, ” states Don Myers, real estate agent and Pre-foreclosure consultant at the Arizona Department of Foreclosure Assistance, Inc. , a non-profit organization, Tempe. AZ-DonBMyers@gmail.com

    If real estate Pre-foreclosure investing sounds like something you want to know more about, here's a recommendation—“Contact a Pre-foreclosure real estate specialist. Unless you know the secrets, it is difficult to find and move quickly enough to get in on the ground floor of the majority of opportunities. Don't make the mistake of spending thousands on programs offered by TV Pre-foreclosure pitchmen, ” Myers stated, “a Pre-foreclosure specialist does all the leg work and offers you the opportunity to invest or pass. With a real estate foreclosure specialist you know you are on firm legal ground in every investment. ”

    A licensed real estate professional, who specializes in foreclosure, is the secret to foreclosure investing success. Pre-foreclosure real estate specialists look for new investors and that new investor could be you.

    Dorothy M. Neddermeyer, PhD, author, speaker, and inspirational leader shares her secrets to real estate investing. Dr. Neddermeyer empowers people to view life's challenges as an opportunity for Personal/Professional Growth and Spiritual Awakening. http://www.drdorothy.net

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