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tods5eshoes · Wysłany: Nie 18:31, 20 Mar 2011 Temat postu: mbt mwalk 8305

How to Buy Foreclosures for $. 10 on the Dollar by Bryant Georgen
In this article, we��re going to be looking at the opportunity, foreclosures, three phases of foreclosures, why invest in foreclosures, the reasons for investing in foreclosures, pre-foreclosures, finding foreclosures, and assignments.
Real estate is an excellent investment because it��s always in demand and everyone has to have a roof over their heads. Real estate is a commodity just like anything else in our society. When the price gets too high, it adjusts down to where the buyers believe there��s value. So, when real estate is high, few buyers buy, and when real estate is low, below the comparables, more people buy. If you buy, and you��re an owner/occupant, and you plan on staying in your home for 5-10 years, the market ups and downs don��t concern you too much. However, if you��re a speculator and you buy near the top of the market,[link widoczny dla zalogowanych], and the values peak and turn down, you could be holding a commodity that is worth less than what you paid for it. That doesn��t make for a very good short-term investment.
So, exit strategies when buying properties are very important. In our recent market many speculators and homeowners had extended themselves by investing in properties with the expectation of continued appreciation with owner/occupants with poor credit and no money down, used short-term ARMs (Adjustable Rate Mortgages) and went out on a limb and got involved in property that they also hoped would continue to appreciate. And so, because of all this speculation, we have the highest amount of foreclosures than ever before. Many investors thought that they would be in and out of a property in a short period of time and opted to use these ARMs thinking that they would be able to sell the property before the interest reset to a higher percentage. However, because property values turned down, and property owners were not able to sell their properties, their ARMs reset and left them with higher interest rates and higher payments that they couldn��t meet. Now, homeowners who own property that lost value aren��t so worried because the property is providing them with a roof over their heads. So, they just plan on staying put for in a couple of years the prices will come back. Now, this left first-time home buyers and investors with a tremendous opportunity with these foreclosures. Now, given that money in real estate investment is made when you buy the property, it��s a great time to buy a property at a discount with very low interest rates. The only thing that is challenging us right now is the exit plans. And so with the amount of present inventory it��s imperative that you purchase at a low price and that you sell at a low price compared to properties that are for sale in your area. Quick flips can take a little longer to sell and it��s always best to price properties slightly less than comparable properties in your area.
Foreclosures have been around forever. Only now, there are just more of them. It kind of seems to be the buzz on the street. Seasoned and novice investors want to invest in foreclosures. In 2004, foreclosures accounted for 2% of all home sales in the US. In the first quarter of 2008, foreclosures account for 30% of all home sales. During the first quarter of 2008 in Stockton, California, 72% of the properties closed were in foreclosure. During the first quarter of 2008 in Las Vegas, Nevada, 45% of the properties closed were in foreclosure. So, you can see why there��s so much interest in foreclosures. Now, the reason why they are so attractive is that, if you are going to be successful in real estate, you need to work with a motivated seller. There aren��t motivated sellers like those that are going to lose their homes because they aren��t making the payments. Now, prior to this point, foreclosures were typically as a result of divorce, unemployment,[link widoczny dla zalogowanych], and medical bills. In addition to these reoccurring reasons today they are also a result of the ARM (adjustable rate loans) being reset from a lower interest rate to a high rate making the payment higher and perhaps unaffordable for the homeowner and the property values dropping, leaving no equity.
What happened to create this situation? Well, people with poor credit and bad credit were given loans for properties when they shouldn��t have been given them in the first place. In California, they were approving people at 22 times their annual earnings instead of 3 times, which is normal. They were hoping that the appreciation would continue so they can get out of the property with a fist full of money and use it for a down payment in a more affordable market. However, the market lost it��s steam and property values dropped and these properties were stuck with a property that at many times was worth less than what they paid for it and, when their loan reset, they couldn��t make the payments. Investors also bought homes on the come hoping that they would ride the gravy train and be at the right place at the right time. Many of these people are walking away from their homes and many of them actually have good credit and can make the payments, but their thinking is why should they make payments on a property when it��s no longer worth what they paid for it. It might take several years for the property values to come back. So, they are just letting their properties go to foreclosure. So, this brings us to a great opportunity for the investor who knows what they��re doing. Now, let me underline that. Every once in a while the planets are aligned and everything is in sync for a great opportunity. That is what is going on real estate today.
Foreclosures are divided into three phases. The first stage is pre-foreclosure. If they have any equity then you can work directly with the homeowner. However, if there is no equity, then you will want to do a short sale.
The second phase is the auction. This phase is usually reserved for the experienced investor do to the financing, the property inspection, and the attached liens.
The third phase is called the REO which stands for Real Estate Owned. This is where the property hasn��t been sold at the auction and the lender gets it back. This is the safest way to buy foreclosures because all the encumbrances have been removed and you can inspect the property before you buy.
It��s very important that you remember this. Not all foreclosures are a good deal. It��s vitally important that you act like a real estate detective and get all the facts about a property before you buy. This is a very important part of the process. The more you know about the deal, the better it will be for you. It really is all about the numbers. Now, that seems fairly simple, but it really isn��t. When I say that it��s all about the numbers I mean the numbers of properties that you have to choose from, the amount of research that you do, the cost and expenses versus the potential profits, and the number of offers you make. Depending on whether you��re in a deed state or a mortgage state, the foreclosure process could take anywhere from 21 days to 120 days or longer. If you��re in a property that gives you a shorter time frame to do your homework, you need to find the most efficient way, and fastest way, to make a decision about each property that you��re interested in.
Remember that a foreclosure is an opportunity to find a good deal. It��s not always a good deal. And, in today��s market, there are some homeowners that are being evicted from their homes and they are leaving the properties in a complete state of disrepair. They are pouring paint on the carpet, putting holes in the walls, and taking the appliances and heating and air conditioning out. So,[link widoczny dla zalogowanych], if you��re looking at a property that you aren��t able to get inside and see the condition of the property, then you may be buying a property that can easily cost you more to fix it up than what it��s worth. So, again, be sure to do your do diligence on each and every piece of property.
People often ask why invest in foreclosures? Simply, foreclosures are at an all-time high, which presents an outstanding opportunity like the ability to make high instant profit margins for the well-trained investor who can buy at a steep discount in many cases. Deals are up because borrowers are defaulting on their sub prime loans, ARMs are resetting to higher percentages, falling property values, balloon notes coming due, unstable security and financial markets causing financial losses, and an uncertain economy which leads to layoffs.
There��s always a steady inventory of new property. Foreclosures really aren��t understood very well or work very well. Most people don��t understand the process. There��s minimum of information for the uninformed public, some properties can be purchased for little of your own money (like I said before, these sellers are definitely motivated),[link widoczny dla zalogowanych], and banks don��t want properties so they want to get rid of them as quickly as possible.
Foreclosures are a fact of life. Anytime a mortgagor reaches an obligation of a security document like a mortgage, deed, or trust (or something like that), the lender has the right to foreclose on the property. The grantor most likely doesn��t want the property itself but they do want repayment of the funds owed.
In today��s market we��re seeing lenders lowering interest rates, extending loan terms, and there��s even talk of forgiving part of the mortgage amount. Even so, there��s still tons of foreclosures to work.
There��s an orderly process to the foreclosure which provides an opportunity to cure the situation. However, some homeowners aren��t in a position to cure that default.
This may happen because of a number of reasons: Loss of job by one or more homeowners, financial crisis or need for immediate cash, health or family problems, business failure or downturn, divorce between couples causing a need for property liquidation, death of the property owner, adjustable rate mortgages resetting to higher interest rates which result in higher payments that the homeowner cannot meet, balloon payments which are payments that cause a challenge to the homeowner, a job transfer, borrower may have two mortgage payments, or out-of-state or out-of-town owner.
Now, let��s talk about pre-foreclosures. Many times you can catch a property before it has gone on the auction block. We call this time period pre-foreclosure. The property is in default and, most likely, the mortgage payments are several months behind. The property owner may have no means of curing the default yet the clock is ticking for when the auction will take place and everything will be lost.
Given that a foreclosure on a person��s credit record is the single most damaging item preventing any future borrowing for year��s to come, a homeowner in pre-foreclosure should be very happy, and eager, to work with you. Without your help not only will they lose their home, but their credit will be destroyed.
A fundamental key to making money in foreclosures is understanding why the property went into foreclosure to begin with. Perhaps the owner had a temporary cash shortage. You may be able to help them by taking an equity position in the property in return for rectifying the situation. Or, the homeowner may just want to dump the property before their personal credit is destroyed. You can help solve their immediate problem and give them a new start.
There are many sources to aid you in finding foreclosures. Hopefully you can find a foreclosure before it has gone too far into the foreclosure process and all possibility of redemption have passed.
In today��s market, it��s much easier to find foreclosures than ever before. The following are ways to begin your search. There are classified sections of newspapers, legal newspapers, attorneys, FSBO (For Sale by Owner), realtors = short sales/REO��s, auction companies, IRS auctions, bankruptcies, probate court, county courthouse/registrar of Deeds (this is where it all starts! )
You want to accomplish three important items before beginning your foreclosure investing. You will want to identify which phase of the foreclosure market you want to work, you��ll want to decide how you will find foreclosures, and identify at least two exit strategies. I��ll go into more detail in future articles. Or, if you don��t want to wait that long, feel free to visit my foreclosure investing website and get all the information you need now at http: //www. got-a-grand-get-a-house. com.
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