Investing in pre-foreclosure properties gives rise to a number of monetization strategies. These are various ways in which you can generate a desirable return by investing in a pre-foreclosure investment property. It's beyond the scope of this article to explain them all, but here are four popular ways to exit and monetize a pre-foreclosure investment.

1. Buy and flip

Buying a pre-foreclosure property in order to subsequently sell or "flip" it is fairly straightforward. The idea here is to purchase the property at a substantial discount to its true market value and then, after buying the property, selling it for full market price. Your profit is the difference between what you pay and what you sell the property for.

2. Buy and flip with no money down

Buying and flipping without any of your own cash on the line is where you essentially sell the pre-foreclosure property before you need to outlay cash to buy it. You'll need to secure financing to facilitate this kind of deal, but it is a great way to make money without risking any of your own cash. In other words if you sell the property at full market price after buying it at a substantial discount from the owner, you will make a profit, without outlaying any of your own money.

3. Rehab and sell

Rehabbing and selling is where you buy a pre-foreclosure property on the basis that repairing and renovating it will allow you to sell the home for a good price and thereby profit on the deal. Provided the cost of renovation is much lower that the corresponding increase in value, this approach can be incredibly lucrative.

4. Rehab and rent

Rehabbing and renting out a property is similar to rehabbing and selling, only your aim is to generate an income stream rather than make a capital gain. Depending on the state of the property, you may not need to make huge improvements - just a few simple and/or cosmetic changes will do - and you'll still be able to command a decent rental rate.

These are just a few monetization strategies available to you as an investor in pre-foreclosures. There are many derivatives of these, plus entirely different money-making approaches too. To get a complete picture of the possibilities be sure to check out my site.

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