Pre foreclosure- A Pre forecloseure is a deal between the homeowner, seller, and in sometimes, the lender. This can be a very successful way for both parties to make a quick transaction. First, start by seeking for loans that are in default. With this option, you will be able to inspect the home and determine what the seller's needs are. Also with a pre foreclosure, you will need to find out the actual value of the home, what it will cost for repairs, and how much profit you could make on the resale. To stay ahead of the game, you will need to make any repairs as quick as possible and turn a quick sale after you purchase the home.
Discounts off market value as high as 40%
Requires a very small down payment
Provides time to conduct research on specific properties
Sales agreements can be customized and flexible
Homeowner can sometimes be hard to reach
Competition for the purchase is high
Possibility of negotiating with other lien holders (second mortgages, Government liens, etc.)