Business Builder Plan Blog

Some people think that it's hard to get into the business of buying foreclosued properties because owners it's too expensive. However, this is just not the case. If you want a quick, easy way to buy preforeclosures and make a profit, here's the best way to do that. You simply need to find a home that has a low-value first mortgage and a smaller second mortgage that make up the entire value of the home. If you choose wisely, you can easily make a quick profit without very much effort or investment.

Imagine that you find a house that's listed as a preforeclosure for the second lien or junior lien, for the price of $20,000. The first mortgage is for $100,000, and the home is worth $160,000. You can buy that second mortgage for a lower price in many cases, allowing you to make a profit and still sell the house for a reasonable price. If you buy that second mortgage for $4,000 at an auction, you'll make a profit of $16,000 when the owner sells, refinances, or loses the home in the foreclosure process. Plus, you'll have the upper hand of actually owning their home subject to the first loan being paid off, so you can help them out if you want.

This type of loan can be funded by anyone because it's under the value of the home and can be shown to be paid off immediately upon closing. If you want to help the owner out, you can even help them find a buyer, a refinance company, or a loan modification program so that they can keep their home and you can get the cash you deserve. These types of deals are available all over the country, which means that you can find them no matter where you're at.

When you do this type of a preforeclosure transaction, you will want to watch out for the bad owners. Most people in this situation are good people who fell into bad circumstances and want a solution. These people are worth helping. The other type are the ones who deliberately let their home go into default, or even those who committed fraud by getting a loan illegitimately or with no intention of paying it. The distinction between these two is easy to see, and you will want to stay away from those “bad owners” when you get into buying preforeclosures to turn a profit.