Online Foreclosure Services Overview

Many websites specialize in foreclosure services where you can search thousands of listings from the convenience of your computer. At any given time, between 3 and 5% of residential property loans turn into foreclosure homes for sale. The Mortgage Bankers Association of America prepares annual reports about the state of housing loans, and out of approximately 20 million home mortgages, one million properties are considered delinquent.

foreclosure overview  | steps to buying foreclosures

Pre-foreclosure

You may be able to take advantage of buying a home pre-foreclosure. A pre-foreclosure occurs after a homeowner has defaulted on his property, but before it has been sold at auction. You may be able to negotiate to buy a home at a discount before the property is sold at auction.

Auction

In all foreclosure auctions, a notice must be published locally. Although your county clerk's office is a great real estate resource for identifying foreclosures, it can be very time consuming. Foreclosure.com offers one of the largest real estate databases of foreclosure homes in the country, including Bank REO, Pre-foreclosure, Government Foreclosures, including the Federal Deposit Insurance Corporation (FDIC), HUD, Government Services Agency (GSA), and even the Internal Revenue Service, and bankruptcy.

REO

Once the lender officially reclaims a home, it becomes a real-estate-owned property (REO), so you may also be able to buy this property directly from a lender. Lenders are not interested in having real-estate inventory on their hands, and often sell their properties at discounted prices as soon as possible. To determine a reasonable offer price that will satisfy the debt to the lender, find out the amount in default and the remaining loan balance.

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Determine the Real Estate Financial Statistics for a Property

Before you buy an investment property it is critical that you create your own projection of the property's profitability. Real-Estate-Proforma.com has a quick-proforma with which you can calculate real estate financial statistics such as Internal Rate of Return, Capitalization Rate, Cash-on-Cash, Debt Multiplier, Loan-to -Value Ratio, Debt Coverage Ratio, and Mortgage Payments. You can use this JavaScript proforma to project the profitability of a real estate project. By becoming a member you will receive access to a number of Excel real estate proformas. membership | services

If you are analyzing another person's proforma, or you are examining a prospectus for a real estate deal, it is very important that you read the document carefully and determine how the values of the financial statistics above are being calculated. For instance, values such as the Cap Rate may be determined from overly optimistic projections of the future rental income of a property.

You can "reverse engineer" the financial projections you receive from a prospectus and/or request the Excel (or other type of) spreadsheet a developer used to create their proforma. A very useful Excel or Visual Basic macro used to check Excel formulas is available in the spreadsheet below for download. Download Mortgage Formula Excel Spreadsheet

The due-diligence you do on a potential investment may uncover a number of potential problems with a real estate deal and we suggest you research each real estate investment very carefully. There are a variety of real estate financial consultants who can help with this, but if you are like many Real-Estate-Proforma.com members, you can or are learning to do your own due-diligence.

We hope you become a more successful real estate investor by using this site! membership | services