Key to Real Estate Success for Beginner Investors
- Distressed properties are a good option for the beginner investor. A distressed property is one that is in danger of foreclosure with no hope for the homeowners to salvage the loan. Locating these properties can be accomplished with a visit to the county clerk's office. Ask to see the records for homes that are facing foreclosure. Homeowners that have had a mortgage accelerated are good candidates to contact for a loan assumption. This method allows real estate investors to own a property for a few thousand dollars in closing costs, assuming the original loan and its terms.
- Once you have located a list of properties in distress, contact the homeowners to find out if they are viable candidates for a loan assumption. A loan assumption allows you to write a contract on the property, submit it to the lender and provide qualifying credit documents to take over the loan for its current balance where the homeowner will make no profit on the loan.
- Have a market analysis completed on the property prior to reselling it. Discover a reasonable amount to resell the property. Market the property for a few thousand dollars less as a "For Sale by Owner". Continue marketing until an acceptable contract is obtained. This can be achieved is as little as 30 days.
You can close the escrow on the property with the new owner before ever having to make a mortgage payment.