Foreclosures When Owner Is Underwater?
Here in San Diego prices are sky high and increasing. Many buyers are so desperate to get into homes that they are completely over-leveraging themselves. I believe that when interest rates rise and they can't afford the payments there will be a rise in foreclosures. However, if interest rates rise, it is possible/probable that housing prices will fall causing many of these buyers to be underwater.
My question is what are the best ways to profit from these properties? Is working with the banks the best/only option?
Thanks in advance for any and all thoughts.[ Edited by dstudeba on Date 03/29/2004 ]
One possible opportunity in these situations is to try a short sale. If the owner is truly broke and the property is in bad shape and over leveraged the bank may be willing to take a lose on the deal knowing that no one will buy it a the trustee sale. Better for them to take the loss than later.