A foreclosed home could offer a lot, so check out discount foreclosed homes. According to the National Association of Realtors, there will be more than 1 million foreclosures in the next two years. Before you consider buying a property on the foreclosure market, be sure to do your homework. Buying a home in foreclosure can be easy, but it is not without risk. (You may consider using a reverse mortgage product to finance your real estate investments.)

You can usually buy one through the state process. It is usually held at the local courthouse in the clerk’s office or in front of the foreclosed home. Buying a property at auction probably represents the highest potential return, but also the riskiest.

You might consider buying a home before foreclosure. You can find a home before foreclosure by studying public notices about homes in default. The information is available from Internet companies such as Home Foreclosures.com, HomeForeclosure.com, and RealtyTrac.com. However, you will pay a fee for their services.

There probably won’t be much, if any, competition because the house is usually not for sale. It’s a private deal. You offer a price below market value but above the amount owed on the bank loan. What makes it difficult for people is the idea of ​​approaching an owner who has not yet put up a record for sale.

One of the best ways to make a deal is by buying a property wholesale and selling it retail. The idea of ​​flipping isn’t very popular these days, but in essence, that’s what wholesale is. All you are doing is buying at a discounted price and then reselling it in a short amount of time. There are different types of people involved in wholesale such as scouts, distributors, and retailers. If you need cash to finance your project, you might consider refinancing your mortgage.

A scout dog or bird, if you will, is someone who gathers information, locates potential deals, and then sells the information to other investors. When you become an explorer, very little knowledge or money will be required. The scout will locate distressed properties, collect the information, and then present it to another investor for a fee. A headhunter is paid from $500 to $2,000 for each lead they provide to an investor, depending on the price of the property and potential profit.

A dealer will locate a distressed property and sign a contract with the owner. Dealers sometimes buy properties wholesale and then sell them at retail or sell the contract to another investor. Being a dealer is riskier than being a scout because dealers put up their own money to secure the deal. A merchant does not have to deal with tenants and can earn more income without having to fix up the property.

What a retailer does is buy properties from dealers. Retailers fix up properties using their own money, therefore taking the most risk, but also receiving the most profit.