Buying Pre-Foreclosures
Successful purchase of pre-foreclosures whether working with the owner or the lender (i.e. Bank) usually involves a few key points. Start by locating the default loan in an area suitable to you. In most cases the foreclosures are due to financial hardship, the owner may not have been able to keep up with wear and tear or updating on the house, you might have to do some fix-up touches. Make sure that your cost of the home and the repairs don't take too much away from your resell price. Have the property inspected. And remember, working with the owner's needs in mind during negotiations is in your best interest. There will be a lot of competition. With the savings on the market value at 20% to 30% on average, and (when properly structured) a low cash down payment, the owner will have his choices.
The court house research can seem tedious and there is some negotiating with banks but your profits will prove to be worth it
If your are looking for fast profit such as a fix-up and resell. Make sure not to waist too much time before putting the home back on the market.
CLICK HERE for a list of forclosures in your area!
Buying at the Auction
Auctions are by far the most exciting way to purchase your foreclosed home, whether it's for investment or just getting a great deal on your next home.
You might want to witness one before you take part in one yourself. .
It is a good idea to have a title search done.
Once you have done your research on the properties available and that suite your needs whether for resell or not. Determine your bid price. Although a 10% certified check may be all that is required at the time of the auction. In some cases, the balance is due that day. This is not standard but it does happen. Research is needed on all auctions. You may find one that gives you up to a week to come up with the balance.
Most investors can achieve savings of 35% to 45% off market values with excellent return on investment.
CLICK HERE for a list of forclosures in your area!
Buying REO ("real estate owned")
When checking out REO properties keep in mind that although it is probably the easiest way to buy foreclosures it isn't the most profitable if your are looking for real estate investment returns. On average you can save 5% to 15% and if you really know what your are doing you might see a savings of 25% maybe more. This is an auction for the person looking to get themselves a nice home at a good price. Maybe sell the home that you are living in and buy an REO foreclosure and have a little bit left over for yourself
Keep in mind that the lender is not in the real estate business, and this property is not something that they want to hang onto for long. The lender may take care of the taxes that are due. Some will even make the repairs needed on the property to sell or even give a discount to the buyer to cover the cost of the repairs needed.
There are a lot fewer worries about the title as well. With REO foreclosures the lender is almost always the senior lien holder. This means no title head aches for you.
When buying /investing in foreclosures always do your homework
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