Buying Foreclosures As Investment Property

Posted on | January 27, 2010 | No Comments

In the real world and in today’s day and age, you will have to take note of the benefits of real estate investing. Real estate investment brings a great deal of profit to those who practice it with diligence.

Auction properties can be quite profitable too, but the most lucrative thing here is the sale itself. Nowadays lots of people know that foreclosure auctions are a great way to make quick money for savvy investors. Foreclosures have become quite common in this current real estate market, when a lot of properties are moving past short sale. When you take part in an auction, be careful to have and stick to a budget and not to get into a bidding war that can make you pay far more than what is appropriate and hence make you lose money.

There are many options in terms of getting deals through bank foreclosures also. One can get a range of apartments, houses and also commercial buildings and property through bank foreclosure. The main objective is to buy cheap and sell for more or perhaps rent the property out for reasonably high monthly income. The problem with auctions of foreclosed properties is that you cannot inspect the property and while the properties can be in various price ranges you would do well to consider the fact that you may need to add in some repair costs over the auction amount.

When dealing with banks or lenders on foreclosures, try to remember the following. Banks are notoriously unresponsive, expect extra work, unreturned phone calls, and to wait several weeks after you make an offer. Buyer’s agents make less money (banks often cut their commissions) and have to work harder to get a deal for their clients.

Sometimes the discount on foreclosures are relatively small, this is because the bank is trying to make most of its money back. Since neither the bank nor the government wants to play landlord, both need to get these properties off the books immediately. It is also possible that the REO department has a price set higher than what the house may be worth, when taking into account repairs and maintenance, so be aware.

Remember foreclosures listings are private real estate sales between the bank or mortgage lender and you, so there may be additional flexibility in both price and financing terms. Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney’s fees and any costs association with the foreclosure process. In order to bid at a foreclosure auction, you generally must have a check in your hand (or readily available) for the full amount of your bid.

If you want to get an idea of what all is available in terms of foreclosed properties you can look online as there are many such listings available on a wide array of foreclosure websites.

Clark Walker uses Atlanta investment property to fund his passive income for retirement.

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