New York Foreclosure Homes for Sale – How Investors Make Money

Published on September 17th, 2009.

For investors to make money for purchasing property in the short sale, they first have to have an understanding of how the foreclosure process takes place. This is vital in this day an age particularly now that president Obama is pushing to have the short sale process abbreviated to such an extent it is able to take place in a matter of 2 – 3 days. This, by the way is designed to help the home owner, not the realtor or investor, and many realtors are saying that the short sale is becoming like the Wild West out there.

But if realtors are going to have to work a littler harder for their money, then so be it, invariably we all have to work a little harder for our money in these poor economic times we are experiencing.

The two strategies which are used to make money in foreclosures or the short sale are long term wealth building and making quick cash. Both of these factors have to be in place to be truly successful, however some investors employ one or the other and still make money. Wholesaling, rehabbing and buying to fix and rent each have their place in the equation, but buying property for rentals is the way you build long terms wealth. While wholesaling, and rehabbing means quick and usually large profits in the short term with intervals between deals.

To enjoy long term wealth, you would buy a property, fix it, rent it and add it to your property portfolio, then you would obviously buy another and another. In states where there are high rates of real estate appreciation, such as California and the Northeast, this method is a very good option. Real estate is difficult to sell fast once you have invested your money in it, as it is a large ticket item for most people and at present it is a buyers market.

If you are an investor who wants to make use of a quick cash strategy, you need to look up flipping. Flipping property means getting in quickly and getting out quickly. So you buy, fix and resell in the shortest period of time (also known as rehabbing. Once you have sold you identify another property to flip.

Any kind of investment in property is cash intensive, whether you buy in a short sale, on the court-house steps or real estate owned, you have to have pre-finance approved as in this market, money likes speed. You don’t want to miss out on the deal of a lifetime because you don’t have the money available to buy the property you want now. Banks, auction houses and home owners are not going to wait for a prospective buyer to have their loan approved. You can also count on the fact that you will have to pay for fix-up costs and perhaps even holding costs, so these also have to be accounted for.

Filled under Foreclosure Homes.