Posted on 09-01-10, under Tips for investing.
Real estate investing is ultimately the fastest and safest way to create lasting financial security. Buying foreclosure homes has always been a most profitable investment property strategy, when done correctly.
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.
The key to making a killing in real estate is to be able to buy a property at a price that is much lower than what it is worth and then not only selling it higher, but also perhaps weighing the rental option too. Many people also get good deals through the bank foreclosure routes, where apartments, condos, houses and other real estate can be bought at a price that is well below the going market rate. In a property that is being auctioned, you do not have the option to inspect the property, and when you get what is a cheap price, you may have to factor in some higher costs in terms of repair and maintenance too.
Dealing with banks involves quite a bit of effort as banks can make life miserable by being sloppy, tardy, and unresponsive while also making one wait for a long time after the deal is accepted to close on it. This is also one of the reasons why bankers’ agents make less money as banks cut their commissions.
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.
When it comes to foreclosure listings, the dealing is between the individual and the bank or the mortgage lender. This means there is some scope of price banding and flexibility. The foreclosure sales take into account the loan balance, accrued interest and attorney fees, plus costs dealing with the foreclosure process admin. In order to buy here, you must have your check ready to pay the full amount on the spot.
There are a large number of websites which you can use to find foreclosure listings for every city and state. Some of these websites specifically and exclusively deal with foreclosure listings only.
#1 Nancy - 24 March, 4:21 AM
Hi,
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Nancy Smith.
nancysmith008(at)gmail(dot)com