Why Start Real Estate Foreclosure Investing
As many people succumb to the pressures of the recent economic downturn, the rate of homes in foreclosure is increasing dramatically. While this is terrible news for the person going through foreclosure proceedings, it can mean finding some excellent bargain investment properties for any wise investors watching the markets.
What Are Foreclosures?
Foreclosures happen when the owner cannot pay his or her debt to a lender such as a bank. During a mortgage agreement between owner and the lender, the property was used as collateral for a loan. The foreclosure follows the contents of the mortgage contract wherein the mortgagor has to surrender ownership to the mortgage upon failure to comply with the terms of payment.
Why Buy Foreclosed Properties?
When a lender begins foreclosure proceedings, they aim at recovering the amount of money that is outstanding against the property. This can often mean the property is being sold for a much lower price than the real value of the property. Wise investors could find themselves purchasing properties at only a fraction of their true value with just a little research. Buying an investment property below true market price can mean an instant increase in the amount of available equity you have.
There are three options if you're considering buying foreclosed property. Each opportunity comes with distinct advantages and disadvantages.
Pre-Foreclosure
The first option is to try and buy property during pre-foreclosure. Pre-foreclosed properties are homes that are still owned by the home owner. This means the bank hasn't taken possession as yet. The current owners are very motivated to sell the house to get themselves out of trouble, so you could easily pick up a great bargain.
Court Actions
The second option is buying during the court auctions after the property has been foreclosed upon. The disadvantage to an investor in this situation is that if there are several bidders at the auction, this could drive the price higher than you were willing to pay.
Purchase Directly From Lenders
The last opportunity is when the property has been fully acquired by the lender. Lenders are usually banks and are not involved in the business of real estate. This can be the most hassle-free way to acquire foreclosed property. Usually banks agree to negotiate the price of the property. This is the opportunity to get a good deal without the burdens of other options.
Whichever option you choose, it's always vital that you inspect the property thoroughly and investigate the true extent of any debts outstanding against the home.
Once you're sure the numbers stack up the right way, you could easily be purchasing an investment property that is valued so much higher than the price you paid for it. Wise investors also understand that by keeping purchase costs low, they also have the opportunity to build an ongoing source of income as the rent can often exceed the costs associated with owning and maintaining the investment property.
Always be sure to spend some time researching into any potential foreclosed home you're considering buying and you'll soon find that there are opportunities to make great profits very quickly. - 23200
What Are Foreclosures?
Foreclosures happen when the owner cannot pay his or her debt to a lender such as a bank. During a mortgage agreement between owner and the lender, the property was used as collateral for a loan. The foreclosure follows the contents of the mortgage contract wherein the mortgagor has to surrender ownership to the mortgage upon failure to comply with the terms of payment.
Why Buy Foreclosed Properties?
When a lender begins foreclosure proceedings, they aim at recovering the amount of money that is outstanding against the property. This can often mean the property is being sold for a much lower price than the real value of the property. Wise investors could find themselves purchasing properties at only a fraction of their true value with just a little research. Buying an investment property below true market price can mean an instant increase in the amount of available equity you have.
There are three options if you're considering buying foreclosed property. Each opportunity comes with distinct advantages and disadvantages.
Pre-Foreclosure
The first option is to try and buy property during pre-foreclosure. Pre-foreclosed properties are homes that are still owned by the home owner. This means the bank hasn't taken possession as yet. The current owners are very motivated to sell the house to get themselves out of trouble, so you could easily pick up a great bargain.
Court Actions
The second option is buying during the court auctions after the property has been foreclosed upon. The disadvantage to an investor in this situation is that if there are several bidders at the auction, this could drive the price higher than you were willing to pay.
Purchase Directly From Lenders
The last opportunity is when the property has been fully acquired by the lender. Lenders are usually banks and are not involved in the business of real estate. This can be the most hassle-free way to acquire foreclosed property. Usually banks agree to negotiate the price of the property. This is the opportunity to get a good deal without the burdens of other options.
Whichever option you choose, it's always vital that you inspect the property thoroughly and investigate the true extent of any debts outstanding against the home.
Once you're sure the numbers stack up the right way, you could easily be purchasing an investment property that is valued so much higher than the price you paid for it. Wise investors also understand that by keeping purchase costs low, they also have the opportunity to build an ongoing source of income as the rent can often exceed the costs associated with owning and maintaining the investment property.
Always be sure to spend some time researching into any potential foreclosed home you're considering buying and you'll soon find that there are opportunities to make great profits very quickly. - 23200
About the Author:
Wrong time to invest in real estate?? Gary Z. Bryant says your wrong. Learn more about Real Estate Investing and Real Estate Foreclosure Investing
posted by X - Men @ 4:09 AM
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