Money in Foreclosed Properties

Foreclosed properties are source of bargain properties. One can buy them; and then, either rent them out or upgrade them to for a profit. Records show that in 2005 alone, there were 800,000 foreclosed properties, and these increased quarterly since then. To dabble on foreclosed properties, there are questions that need to be answered –

• What type of property to buy?
• Where to get money to purchase the property?
• What to buy- foreclosed or auction properties?
• Where to buy- from banks or from the government?
• How much taxes needed in buying and selling the property?
• How much are the renovation and upgrading costs?
• How to renovate- thru owner’s labor or thru expert construction workers?
• Will he either to sell or rent out the upgraded property?
• How long will the investment be recovered or makes a profit?

Some schemes of buying foreclosed properties offer a no-down payment plan. This seems very attractive, because whatever happens to the housing loan, the buyer will not absorb any loss. But this is not the case. Once the borrower-buyer fails in his amortization, and his property foreclosed, definitely his credit standing will greatly suffer. And to recover good credit standing, it will take years of being a good loan payer.

Sometimes, it is better to get a housing loan from a good local lender than banks. The former gives lower rates and shorter loan processing period. It is also a good move to hire a reliable mortgage broker, because in spite of the addition 1% broker’s fee expense, it is worth in terms of expert advice, time savings and getting the best possible terms for ones loan. Buying foreclosed properties is most logical and attractive move of a real estate investor now. Because of the dirt-low prices and the easy terms that financial institutions are offering, to unload these properties out of their systems. But still, the prospective must be careful in making the move. Seek experts’ advice.