A pre foreclosure is when the owners are not making their mortgage payments and get a notice of default from the bank. They have a very limited amount of time to try selling the house or get caught up in their payments before the bank forecloses on the property. Every investor dream is buying a pre foreclosed home in Miami and then selling it for a huge profit. The dream also includes that the property requires little or no work and that you use little or none of your own money.
The dream has become a nightmare for thousands of investors who were not able to sell the property fast enough and were caught in the middle of the biggest drop of homes values in recent history. Usually pre foreclosures are reserved for the very savvy and astute of Miami real estate investors. Pre foreclosures require a lot of work, research, determination, and negotiation.
These are several reasons why you should buy a pre foreclosed home in the Miami real estate market.
1. Motivated seller. The seller is desperate and has to sell right now. When a seller is faced with a foreclosure he/she does not want to lose everything and is willing to negotiate price, terms and everything else.
2. Sellers under huge pressure. Since time is of the essence, the seller does not have the luxury or the time to be playing games. The negotiating process is fast and the decision making is immediate. The seller can not afford to have the house in the market for six months as he/she has to sell now.
3. Huge price discounts. Pre foreclosure buyers are usually getting excellent discounts. Make sure you find out everything about the property including mortgage owed, liens, tile problems, taxes owed before starting the negotiation process.
4. Little risk. Make sure you do your homework including comparables, market analysis, recent sales, pending sales. Find out exactly how much the asset is worth and then there is risk of making a big mistake is minimized.
5. No credit. In many of theses cases no credit and no money is required since the buyer will try to find a buyer right away and unload the property at a profit in the Miami real estate market.
6. Little competition. Not too many investors are involved in pre foreclosures as they simply wait for the bank to foreclosure on the property. For many investors the amount of time and effort of putting one of these deals together is just overwhelming.
7. Fast growth. Just by taking over delinquent payments investors can establish a substantial portfolio in a relatively short time. In this market investors are advised that they will have to rent the house for at least a year before selling it.
8. Instant equity. Since the price is heavily discounted an investor will realize instant equity at closing making these deals very rewarding right away for the experienced investor.
In today’s market the number of pre foreclosures is staggering as more and more homeowners struggle to make their monthly payments. It is now a tremendous opportunity for Miami real estate investors to buy pre foreclosed properties and take advantage of this short term financial market disaster. Soon the Miami real estate market will rebound and the sheer numbers of these deals are not going to be available.
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