the property back, no money in their pockets, and be facing the prospect of having to make payments on an existing senior lien.

This can make private lenders extremely motivated to discuss a deal. Some of you may find your foreclosure-investing niche working exclusively with REO private lenders. Remember, they have made a credit bid for the amount of their loan balance, plus the back payments, plus foreclosure expenses, plus payments on the senior lien.

If no one bids, they get the title to the property. They may sell their position to you for a lot less than their credit bid once they wind up with the property. Lets look at some numbers.

Lets say the lender is in a second position with a $25,000 loan balance, $1,250 in back payments, $750 in foreclosure expenses, and five months of payments on the senior lien of $4,000.

No one has bid above the $31,000 credit bid. You may be able to offer $15,000 cash and have the lender give you title to the property. Do you think that may be a good deal? Our answer is that it depends.

What is the value of the property? What is the amount of the senior lien? Are there other liens against the title that you will be stuck with once you have the title to the property?

Our point is that just because you are getting what looks like a good deal from the private REO lender, as with all foreclosure deals, caveat emptor, let the buyer beware! You still have to do your due diligence and know about the property and the condition of the title before you make an investment.

Another Real Estate Investor You may find you are able to make a deal with the real estate investor who makes the successful winning bid at the foreclosure sale. This investor may be buying the property with a plan to fix it up and put it back on the market. You didnt bid higher during the auction because you had reached your predetermined top bid. But you already have a buyer who will pay $10,000 more than the winning bid.

Credit Bid

Loan Balance Back Payments Foreclosure Expenses Senior Lien Payments Credit Bid

$25,000 $ 1,250 $ 750 $ 4,000 $31,000

You could offer the other real estate investor $5,000 more than they paid to sell you the property on the spot. While they have a profitable plan, they may sell you the property for the immediate $5,000 profit. You would then flip the property to your buyer and make your own $5,000 profit.

Summary

There are four time periods or phases to invest in foreclosures. While the foreclosure timeline varies from state to state, every states foreclosure process includes these time periods.

These four time periods are before the notice of default is filed or posted at the county courthouse, after the notice of default is filed or posted at the county courthouse, during the foreclosure sale, and after the foreclosure sale when the property belongs to a new owner who is either the foreclosing lender or another real estate investor.

You can make Quick Cash in foreclosures no matter what phase you make your investment. The key is to find your niche. Your niche is where you feel the most comfortable and confident. Your niche is also where you consistently make money. As you are getting started, try to make something happen in each foreclosure phase and discover for yourself where you belong.

In the next chapter we will teach you where to find foreclosures. There are foreclosure opportunities everywhere. There are foreclosure opportunities in a good economy and a bad economy. We will also show you how to access the largest holder of REOs in the world.