Exactly what is a “Profit Model,” and why is it so important to pre-foreclosure real estate transactions?
A Profit Model is simply the discipline of deciding exactly how you intend to make money on a real estate transaction before entering into it, and then modeling all of the costs, cash flows and other financial considerations that will effect your bottom line profit. Profit Modeling is particularly critical for “pre-foreclosure” real estate because unlike traditional real estate, the amount of money you make on a deal is based on your ability to manage and reduce both seller AND buyer side costs.
