As a buyer or a real estate investor, you must be wondering how you can make an offer on a pre-foreclosure home.
Pre-foreclosure allows buyers to pay less than the market price for the property and helps sellers avoid full foreclosure.
If you’re looking for affordable real estate properties, look for pre-foreclosure homes.
Here’s a step-by-step guide to sealing lucrative pre-foreclosure deals.
1. Understand Pre-Foreclosure
If a property owner is unable to make mortgage payments, the government can issue a foreclosure notice on the property. The lender may have filed a notice against default or initiated a lawsuit in lieu of the foreclosure agreement. A foreclosure involves several stages, but it can impact the value and ROI-generating ability of the real estate property.
During the pre-foreclosure period, a real estate owner has limited time to either pay off a mortgage debt or sell the property. This requires real estate investors to make quick decisions to avoid full foreclosure.
You can either opt for a hard money loan to finance your pre-foreclosed property, make a short sale, or get a mortgage modification.
2. Know Your Numbers
As a real estate investor, financial stability can help you understand price fluctuations and seek quick financing on an urgent basis.
Use the available data or your past experience to know expected and actual pre-foreclosed real estate prices. Assess your financial capital and find out the difference. This will tell you how the amount of load you’ll need to obtain to break even.
3. Become a Tech-Savvy Real Estate Investor
The US real estate market has dramatically changed in the last few years, especially during the pandemic.
There’s a massive boom in real estate property demands across the US. This is where your tech-savviness will come into play. While you may not be able to visit every buyable property in NY, you can use advanced resources to search and close quick, lucrative deals.
Knowing the market trends will also help you gauge seller’s expectations for a profitable bargain. Always remember that investors have an edge when negotiating a pre-foreclosed property.
4. Make the Offer ASAP
If you have adequate real estate financing available, don’t delay making an offer. You can apply for a hard money loan at Insula Capital Group to accelerate the deal.
Make sure to take renovations, repairs, and other cost-incurring factors into account when making an offer. You must also be able to make a quick down payment if required.
5. Follow the Post-Closing Course of Action
After you’ve closed the offer on a pre-foreclosed property, here are some necessary steps you must take:
- Start by changing all the locks in the property.
- Get the real estate property inspected.
- Apply for immediate ownership.
- Decide whether you want to sell, rent, or develop this property.
Choose the Best Hard Money Lender in New York
Now that you’re aware of the benefits of closing pre-foreclosure homes, don’t delay getting a flexible hard money loan to finance your investment.
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