How to make money buying pre-foreclosure properties.

Want to make money buying pre-foreclosure properties? Here's a list of things to do:

1. First and foremost you need to be honest and straightforward with the homeowner. He or she is already in a stressful situation. In addition, he/she is wary of investors because of all the scammers out there.


2. Locate and contact homeowner in foreclosure. The best way to locate homeowners in foreclosure is by looking at the public records found at your county recorder's office. Many county recorder's offices are now publishing this information on the internet. Keep in mind, that many homeowners are not receptive to having investors cold calling them about their ordeal so you may have to be creative in contacting them. You should try writing to them explaining how you could create a win-win situation for both you and the homeowner.


3. Meet with the homeowner at the property to get a good look at it and also to get copies of letters from the lender. This will be useful to be able to contact the lender.


4. Have the homeowner sign a written authorization to allow the lender to give you the loan information.


5. Find out everything you can about the loan from the lender. The lender's contact information will be on the documents you obtained from the homeowner. Things you want to find out include: unpaid balance, interest rate, loan term, prepayment penalty (if any), monthly payment, amount in arrears.


6. Determine all liens and other public records on the property. Be very diligent in this step, because you don't want to find out about public records after you've bought the property.


7. Inspect the property for major problems. Hire a property inspector if you have any doubt. It'll be worth the additional expense. Remember, these steps are key if you want to make money buying pre-foreclosure property.


8. Find out the current market value of the property. Real estate agents will be glad to help you with this especially if you let them know that you are investor who may require their services in the future. You can also look at websites like Zillow.


9. Negotiate with the homeowner. With all the information above you should have an idea of what you can offer the homeowner. Please note that every dollar you save when you buy is a dollar you'll make when you sell.