It’s no secret that buying and flipping foreclosures can be a great way to make money in a sometimes slow real estate market. But what is a secret in how to get to the foreclosures before they go to auction or become bank-owned so you don’t have to go through all the rigmarole of buying a bank-owned property.  The secret is in pre-foreclosures.  In other words, one of the best ways to make money on a fix-and-flip property is to get a property before it is fully foreclosed on.

Here are some tips on how to do it successfully.

1)    Stay calm. The pre-foreclosure market can be a really difficult place for property owners. Those who are in the process of getting foreclosed on are usually feeling a lot of different things. If the property is the right one for you then you just need to stay calm and keep moving forward. Keep your wits about you so you can make dispassionate and informed decisions.

2)    Find lots of suitable properties. Don’t set your heart on one single property. Find several that will work for you and go about trying to secure them. That way if one falls through you’ve got other options. Look through public records, search online, and look through the local newspaper to start generating a list of properties you can work with.

3)    Don’t come off as a conman. When you approach the owner of the property about selling do everything you can to look like a smart, trustworthy, real estate professional. Come with references and be prepared to answer a lot of questions. You aren’t the only person contacting the property owner and they will rightly be wary of you.

4)    Take your time valuing the property. Many, many real estate investors pay too much for these properties. While you don’t want to take advantage of someone in a difficult situation you also don’t want to overpay and risk losing your profit.  Be very careful with your comparables and price the property conservatively.

5)    Take a professional contractor along. If you haven’t already, make contact with a professional contractor and invite them to come look over the property with you. They can help you estimate how much it will cost you to fix up the property and have it market ready.

Buying a pre-foreclosure can be a great deal but it can also be a lot of work. Do it right so you’ll be sure to turn a profit!

Do you have any tips on buying a pre-foreclosure? Share them in the comments!

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