Many people believe that in order to invest in pre-foreclosure properties you must have a substantial down payment in order to obtain a loan from a investor, bank or other lender. However, nothing could be further from the truth. In fact, someone with no cash and even a bad credit history, can still invest in foreclosures. In other words, there are several ways in which you can still invest in pre-foreclosures and foreclosures with none of your own money down.

One of the most common and popular ways to buy a pre-foreclosure property with no money down is via flipping or wholesaling. Basically, you offer to purchase a property for no money down and a long settlement period. During the settlement period, you look for a buyer. Ideally, you negotiate the sale to the buyer for a price significantly above what you are paying the home owner and for a shorter settlement period.

The end result is that you get paid for the property before you need to pay the home owner. You make a profit on the difference between what you are paid and what you must pay. Because you essentially transfer the money from the buyer to the home owner, you should not need to take out a loan.

Of course, there are risks involved in this approach. You will need to get the lender on board when it comes to having your offer to buy the pre-foreclosure property accepted. You must be absolutely sure of your ability to sell the property at a profit within the settlement period. And you must take into account any legal requirements regarding this process. However, this approach is certainly do-able and has been done with great success by a number of astute pre-foreclosure investors.

A variation of this approach is where you buy the pre-foreclosure property and "assign" your interest to another investor in return for a fee. While the outcome is similar to the previously described scenario, the legal process is different. Rather than execute two separate purchase and sale agreements, this time you enter into a purchase and sale agreement with the home owner, and then a property assignment contract with an investor. This is often a better approach when you have some keen investors in mind. All the more reason to build up your network of fellow property investors too!

These are just two ways you can buy pre-foreclosure investors with no money down. There are numerous other ways, some of which promise even greater return and less risk, depending on your circumstances, the property in question, and market conditions.

For a detailed explanation of the various no money down approaches you can use to buy pre-foreclosures, be sure to get over to my site.

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