How do you know what form of real estate investing is best suited for you?Several years ago, we learned just how powerful foreclosure investing could be.  If you had to try and explain foreclosure investing, you could throw a wide net over everything from a homeowner missing their first mortgage payment all the way to the foreclosure property selling at the courthouse steps.

Then came along the idea of pre-foreclosure investing.Pre-foreclosure begins when a notice of default is filed at the local courthouse and concludes when the house is auctioned off at the Sheriff sale. 

Reason 1 – Sellers Have A Very Compelling Reason To Sell

I don’t know why people who get into this situation do the same thing every time, but they do.  In virtually every case, when you see this situation develop, the homeowner is usually going to fail to make a mortgage payment and the property falls into foreclosure.

When a homeowner falls behind on the mortgage payment, its very difficult for them to catch up.

The main causes leading up into pre-foreclosure are:
1. Divorce
2. Job loss
3. Prolonged illness
4. Job transfer
5. Drug and/or alcohol abuse

Homeowners who find themselves in pre-foreclosure almost always have to sell in order to avoid having the house sold off at auction.  Experienced foreclosure investors know that when they help sellers first, they are then rewarded with these steeply discounted investment properties.

Reason #2 Less Competition For The Serious Real Esate Investor

Many real estate investors don’t know how to evaluate a market and find the most profitable investment properties. These real estate investors typically thumb through classified ads each week and attempt to buy income property.  Some of these investors may work with a real estate agent and attempt to find invesment property – but these are still listed properites with retail prices.

You won’t make it in the real estate investing business if you don’t know how to buy investment property right.  You must learn to pay wholesale or even lower – and this is possible.

Serious pre-foreclosure investors do not pay retail for investment property and do not work regulary with real estate agents.These investors are well trained in locating the best real estate deals in town.Pre-foreclosure investors don’t wait around – they take action and meet with these sellers. 

Now some pre-foreclosure investors mail out postcards and letters and some even make phone calls to homeowners who are in pre-foreclosure.But I have found that the best way to buy pre-foreclosures is to travel out to these houses and meet with the sellers. 

This approach offers the highest investment return with the least amount of competition.Very good combination if you’re interested in building long term wealth.