How You Can Profit From The Upcoming Foreclosure Storm

by Liz Roberts

ARMs (Adjustable Rate Mortgages) are set to rise for homeowners

This year, ARMs, or adjustable rate mortgages, are set to rise for homeowners. Millions of Americans took out housing loans recently in the latest housing boom with the majority of the loans taken out were ARMs loans. Most of the homeowners bought their properties with a reduced interest rate knowing full well that the property was out of their financial means. Many of these homeowners believed that they could easily sell off their properties once the rates began to increase.

None of them, however, knew that the rates on their adjustable rate mortgage loan would rise so dramatically in such a short period of time. Now, due to the sudden rise in mortgage interest rates, many Americans will see their monthly mortgage payments rise very steeply. It is possible these rates may raise mortgage payments by up to 20% this year alone. Further increases are forecast over the next few years, leaving homeowners little choice but to default on their mortgage payments, resulting in their financial institution foreclosing on their properties.

ARMs differ a great deal from a fixed rate mortgage and have always been considered a relatively safe option to use when buying a home. Generally, what happens is the interest rate is variable although it is tied to an index that may raise and fall over time. Usually the rates are likely to only increase around 2% at a time. Sadly for those who have taken out ARMs loans, this is not the case. The bottom line is that those who have taken out ARMs loans to buy homes they could not afford will be facing foreclosure or severe refinancing on their homes due to the steep rise.

Bad news for owners, good news for investors

This may be unfortunate news for homeowners, although, for property investors who are quick off the block, it can be a very profitable investment. Once a property is put into foreclosure by a financial institution, the institution files a notice of default that becomes public record. This record becomes common knowledge to anyone wanting to buy property. Financial institutions are often eager to sell the foreclosed properties to investors at a reduced price. This is often due to the condition the property is in.

A foreclosed property may have some faults or need fixing up before it is able to turn a profit for an investor. One of the biggest problems facing investors wanting to secure a property that is in foreclosure is that many investors are forced to research and negotiate with the homeowners.

Or worse still, investors are facing an investment war by bidding on the same houses as other investors. This is largely due to investors using the same old tired lists that everyone else has. The result is that the investor is more than likely to foot an increased cost for a home that cuts their profit margin significantly.

Is there a better way to secure a pre- foreclosure?

There is another option. A real-estate company that provides a service to their investors by going out and finding homes that are in foreclosure. The market is thoroughly researched, then the properties are secured with an equity position. The foreclosed properties are then put under contract and offered to investors to buy.

For these services, the real-estate company will charge a small service-processing fee for their services. Information on fees and the services supplied by http://LazyRealEstateInvesting.com

Now is the time for investors to profit from the up and coming pre-foreclosures caused by the slowing down of the market and increased interest rates. Don’t get caught in the trap of fighting with other investors over the same lists and the same houses. Do it the lazy way and have your investment property brought to you with all the legwork already done.


Liz Roberts is a real estate investor with Lazy Real Estate Investing.com and a freelance writer specializing on writing real estate investing tips

---
Learn the Insider Secrets of Buying Bank Foreclosure Properties