How you Can Crush REO’s
Unless you live under a rock, you know that there has become a foreclosure crisis in the United States. Foreclosures are popping up more and more. There are thousands of people just like yourself buying and selling foreclosures for profit. Flipping foreclosures is a lucrative way to generate profits, especially now that there are more deals available than any one investor can handle.
An REO’s (Real Estate Owned) is just simple a term to refer to a bank owned property. REO’s are houses that have made it all the way through the foreclosure process, and did not sell at auction. REO’s are great places to find house flippers because banks are not in the real estate buying and selling business. Most banks just want to get rid of their REO’s, so they will price them below market value.
You can also go after pre-foreclosures, which are houses that have not gone to the foreclosure auction yet but the homeowners are behind on payments. The great thing about going after pre-foreclosures is that there is less competition than REO’s, you can help a homeowner stop foreclosure and you can sometimes get a better deal.
There are several ways to flip a foreclosure property. You can Wholesale the property, fix and flip, or do a short sale. I personally prefer to fix and flip houses or wholesale. Fixing and flipping can generate massive amounts of profit in less than 2 to 5 months.
Wholesaling you can make around 10% of what you would make on a rehab but a wholesale can be done with no money, no credit and takes less than one month to complete. When wholesaling all you simply do is find a cheap houses, put it under contract and then assign your contract to another investor for a small fee. You cannot wholesale REO’s with a traditional assignment. But you can wholesale pre-foreclosures all day long.
So what else do you need to know about flipping foreclosures?
If you have never done a real estate investing deal before then you need to know how that you make your money when you buy. That means that buying a house at the right price is the most important part.
Here is a simple formula we use to buy foreclosures.
First we find out what the Market Value of the property is (what this house could sell for in 100% perfect condition)
We take that price and times it by .70
Then we subtract repairs, closing cost, holding cost and all the costs associated with buying a property.
If we are wholesaling we than subtract our wholesale fee. And that is an easy way to come up with your price. This method has worked for us at Big Sky Property Solutions LLC and should work for you.
Before you ever decide to get started flipping foreclosures I recommend that everyone get some education. Read a few books and also find someone to show you want to do. A mentor can help show you exactly what to do and help you avoid any mistakes.
Get started flipping foreclosures today and you will have success.
If you would like to Learn how to Flip Foreclosures Grab a Copy of my FREE 7 steps to real estate riches. http://RealEstateFlippingRiches.com
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