Today, many individuals are making money out of bank owned foreclosures. There are many real estate and home properties that are being foreclosed due to sub-prime mortgage meltdown, and the wholesale buyers are using the two strategies namely the Top Down and Bottom Up to find the foreclosed properties.
You can apply Top Down when the property is listed on Multiple Listing Service (or MLS) or near fair market value. By chasing down the market, the bank continuously lowers the price in a declining market. After the price is reduced several times and when the listing becomes 90 days old, you can make a cash offer to the property at wholesale price level. You can flip the bank owned foreclosed homes to a rehabber below current listing price, at a profit by adding your assignment fee.
Under the Bottom Up approach, the property listing is done by the bank at a very low price right from the first day. Usually the bank owned foreclosed homes are attached to some big issue like fire damage or red tagged by city. When the property is listed at a very low price, the rehabbers take the opportunity to bid up the price.
In general, buying a bank owned foreclosure has turned out to be a discounted bargain and a lucrative deal for the wholesale buyers.
