| There is no doubt that homes in
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| | There may be liens on the property
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| foreclosure offer some of the best
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| | The Auction Phase
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| opportunities to purchase real estate
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| | This is where the most money can be made
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| significantly under value. But as with
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| | buying foreclosed homes. At auction, the
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| all things, there are upsides and
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| | foreclosed property is sold to the
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| downsides to purchasing property that has
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| | highest bidder. If you do your homework
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| foreclosed or is in the foreclosure
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| | before hand, you could realistically buy
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| process.
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| | a property for a fraction of its value.
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| Before you decide to invest in a
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| | Pros
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| foreclosed home, you should familiarize
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| | Discounts from 34 to 45 percent
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| yourself with both the advantages and
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| | Excellent return on investment
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| disadvantages of this type of property
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| | Highest profit potential
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| investment. Knowing what youre getting
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| | Cons
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| into ahead of time may just save you a
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| | Not able to inspect property
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| lot of hassles and headaches down the
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| | Auctions can be postponed
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| road.
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| | Need large cash down payment at auction
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| There are three foreclosure phases where
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| | Improper research can lead to disaster
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| it is possible to purchase a financially
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| | Could invest a lot of time and still not
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| distressed property. These phases include
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| | win the property
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| the pre-foreclosure phase, the auction
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| | The REO Phase
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| phase, and the REO (real estate owned)
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| | The REO phase occurs when the lender
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| phase. Following you will find a
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| | seizes control of the property in order
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| description of the three phases along
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| | to resell it and cut its losses. Since
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| with the pros and cons for each.
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| | the property has no value to the lender
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| The Pre-foreclosure Phase
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| | unless it sells, the lender is often
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| This is the phase where the owner of the
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| | extremely motivated to make a quick sale.
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| real estate still has control. He has
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| | Pros
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| defaulted on his loan and is facing
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| | Discounts from 5 to 15 percent
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| pressure from his lender to pay up or
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| | Title free from liens
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| face the consequences. He is desperate to
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| | Tax arrearages paid
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| sell the property and clear his credit;
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| | Lender may do repairs or offer discount
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| this could add up to big savings for you.
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| | for repairs
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| Pros
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| | Cons
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| Discounts from 20 to 35 percent
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| | Low return on investment
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| Low down payment
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| | Remember; when you invest in real estate,
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| Opportunity to inspect and research
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| | there is a certain amount of risk that
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| property
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| | you must take in order to make a profit.
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| Flexible sales agreements
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| | This means that the properties that offer
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| Cons
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| | the most potential returns are the most
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| Absent or unreachable property owner
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| | risky. Be sure to calculate how much risk
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| Tough competition
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| | you can afford to take before investing
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| A great deal of courthouse research
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| | in foreclosed homes.
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