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Advantages of Bank Foreclosures
Banks
want to stay away from foreclosures. Real estate is not their primary
business.
· You get
a clean title. Bank is the legal owner of the property. You do not deal with
the original owner and to evict anybody.
· You do
not need to worry about taxes as the bank has already made such payments
when it owned the foreclosed property.
· You do
not need to rush for appraisal and inspection. You will have enough time to
do whatever you want to make sure that it is a good real estate investment
for you.
· You may
even ask for a loan from the same bank to finance the foreclosure investment
property.
Bank
Foreclosure Process
A bank
owns a foreclosure home when the owner cannot pay back his or her loan
installments in three consecutive periods.
When the
bank gets the deed of the foreclosed home, selling it as soon as it is
possible is its top priority as it needs the money not the illiquid
foreclosure property. Any amount that you offer over the amount of mortgage
loan will make the bank happy.
Banks
love people who know what they are doing. Prepare a simple plan summarizing
your actions after you buy the bank foreclosed home and show your profits.
This will make the bank feel comfortable as they want to make sure that you
will be able to repay the money you borrowed.
You can
create a lucrative real estate investment business by consistently investing
in government foreclosure homes offered every single day.
Government Foreclosures
The best
part of government foreclosure business is the fact that the government
agencies are not interested in making profit in selling foreclosure
properties. They want to get rid of them as soon as possible. They simply
want to replenish their resources to insure new home loans.
Government agencies such as HUD, VA and others are willing to help you in
finding financing and give you allowance for repairs, if any.
If you
do not like to fix up and repair homes, look for properties that only need
cosmetic repair. If you intend to fix up the foreclosure property or you
have a handyman friend, consider government foreclosures that need extensive
repairs. You need higher profit margin to justify the cost of repair and
your time. Consequently, you make more profit.
How to
Find Government Foreclosure Homes
· Focus on
one area where real estate property values are going up and that you feel
comfortable with.
· Gather
as much information as you can. There are foreclosure listing companies that
offer free listings of government foreclosures. Try free trial before you
commit yourself to one-year or monthly subscription
· Review
the prices of comparable properties in the same area. Try to figure out how
much money you can make after you complete the repairs.
· Before
you make your offer, set a ceiling price for government foreclosure home.
Make sure that there is no additional cost item other than repairs. Do not
get crazy about getting the first government foreclosure property. There are
plenty of them. Never exceed the ceiling price that you set.
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