Buying Foreclosures - Buy & Hold, Turn Into An STR or Even Fix & Flip, They All Work

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Foreclosure comes in different steps. Each provides an opportunity or a disaster.

The cycle of a Foreclosure

When someone starts missing their payments and eventually starts getting "Late Notices", that's a good group for creative finance. When it gets to a "Notice to Bring Current" or we will set a Foreclosure date, That's called "Pre-foreclosure and is a good group for creative finance as well.

When it gets having a sale date set, that's called Foreclosure. That's a tough one to work with for various reasons. One, is that there is a lot of money that you need, to bring the loan current and you have very little time to solve the problem. When it gets to the day of the sale, that's called the Auction. In my opinion, it's a very tough time to buy properties because you are bidding against others more sophisticated than you. It's typically an "all cash transaction" and you are buying a house you've never seen the inside of.

If it doesn't sell at the Auction it's called REO (Real Estate Owned) by the bank. They will do their paperwork and a couple months after the Auction, they will put it on the MLS as "Bank Owned". Again, typically "all cash". We focus and teach on the first two with some on the third. And people make a lot of money.

There are “tricks of the trade” on these and we think we are in the beginning stages of this being very lucrative again, in the market. But, it’s also very important to know what you can and what you can’t do and to have your systems in place before proceeding. 

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