What does Preforeclosure mean? for an investor or home buyer as a Preforclosure investment strategy,

You make money here through equity, which means the house is worth more than the mortgage or indebted amounts.

Delinquent borrowers are given about 3 months to pay the property before it goes to auction. This is very general rule as in one state its 12, yes, 12 months.

It is within these 3 months an investor come in to make money. What happens is that you the investor will buy the property lower than its market value thus giving you the equity for profit.
Equity is the difference of the market values and the amount owed by the borrowers of the money usually the homeowners.

For example, for a 100 thousand house market value, the owners already paid 60 thousand.
This gives you equity as much as 40 thousand, because you will buy the property at 60 thousand or just a bit higher than this and sell it later for market value.

Owners dont usually agree with this arrangement to preserve their good credit standing record becuase their credit rating is long gone. But to get the bank or lending institution and stop the foreclosure process and salvage what ever they can it does make sense.

To get to this big money you have got to know where there are properties for foreclosure are through
Free Foreclosure Listings.