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Introduction
When most people think about foreclosure investing, they envision a process of buying a property at auction for much less than it’s worth, fixing it up (or not), and then immediately putting it back on the market for tens of thousands of dollars more than they paid for it. They think it’s a quick and easy way to earn big bucks in real estate.
Truth is, the process is far more complex and risky. Do you know, for example, that when you “buy a house” at a foreclosure sale, you may not actually be getting the house? You may end up paying $100,000 for a junior lien against a property (such as a construction lien) and have your position wiped out by the buyer of the senior lien (the first mortgage)! What you thought you’d be getting for your $100,000 investment is actually a worthless piece of paper. Or maybe you get the house and find out that the current residents are legally allowed to live there for a year or whenever the latest government mandate prohibiting foreclosure expires. You’re stuck paying the mortgage, insurance, and property taxes, and you’re awake all night worrying about what the current residents are doing in (and to) your property.
When it comes to foreclosure investing, what you don’t know can hurt you. I’ve seen it happen time and time again to very intelligent but ill-informed investors. They miss opportunities by not fully understanding the foreclosure process and get burned by not fully understanding what they’re buying or what they need to do after buying a property in foreclosure.
To capitalize on foreclosure opportunities while minimizing your risk, you need the guidance of an experienced professional. In Foreclosure Investing For Dummies, I serve as your guide, providing the information and direction necessary for your success.
About This Book
Foreclosure Investing For Dummies isn’t a quick-cash, no-risk, no-work guide to building wealth through foreclosure investing. People who want that sort of thing can stay up late at night and watch real estate investment “gurus” peddle their products, or they can attend any of the readily available “free” foreclosure investment seminars that make the rounds.
This book guides you in the methods of making money the old-fashioned way: earning it fairly. I’ve been investing in foreclosures and assisting distressed homeowners for more than 30 years. I’ve achieved great success and experienced my fair share of failures. I’ve had homeowners provide glowing testimonials of how much I’ve helped them, been accused of trying to steal homes from “little old ladies,” and assisted homeowners when con artists have tried to steal their homes. Sad to say, even lost property in foreclosure myself.
In Foreclosure Investing For Dummies, I show you how to invest in foreclosures the right way. I steer you clear of the many pitfalls inherent in foreclosure investing. I show you how to properly and thoroughly research properties so you know what you’re getting into before you buy or bid on a property. I step you through the process of finding the best opportunities with the maximum potential profit and lowest risk. I lead you through the process of buying foreclosures before auction, bidding for them at auction, and purchasing them after the auction from the lenders that have foreclosed on them. I present various ways to cash out and realize your profit after the sale. And I show you how to do all this without misleading and cheating distressed homeowners.
I wrote this book so you could approach it in either of two ways: You can flip to any chapter for a quick, stand-alone mini-course on a specific foreclosure-investing topic, or you can read it from cover to cover. At the end of the book is an appendix of the foreclosure rules and regulations across the 50 states. Although I encourage you to research the foreclosure process in your local area carefully, you can flip to the appendix to get up to speed on the basics.
Foolish Assumptions
In some books that cover advanced topics, authors must assume that their readers already understand some basic topics or have acquired beginning-level skills. If this book were about molecular biology, for example, you’d have to know what
