Dollar Stretcher Foreclosure Homes

By: philip smith

Isn't there a way you can buy one of those foreclosure homes in your neighborhood or in the nearby suburbs and get a bargain investment? Consider this; chances are if you are noticing more foreclosure properties every month, that your local real estate housing market is in the doldrums, and a cooling market means big muscle for the home buyer.

So have you got your finances lined up? A buyer armed with pre approved financing, a little extra cash to sweeten a deal, access to a line of credit for a certain level of repairs, is both welcomed and wise. Time now to get a little smarter and learn about the differences between buying the traditional home in today's market and buying a home in foreclosure.

Much is made about the risk involved in buying a distressed price property, but commonsense should prevail; for greater reward expect greater risk and decide early on what your profile as a would be investor is likely to be. If you search for the safest investment among the bank owned houses now offered for sale through certain agents, or other multi listed government owned foreclosed homes, then your chances of securing a single family or multifamily house in reasonable order at a discount are somewhat smaller than what you can expect from negotiations with a seller/borrower who has recently received a Notice of Default. These are the two opposite ends of the foreclosure timeline. Somewhere in the middle is a chance to buy at auction or immediately after if the home fails to sell to a third party at the auction. Many experienced foreclosure investors believe that greater discounts are possible before the auction, in the pre foreclosure period when pressure on the seller is so great. The risks here are those of spending much effort and finding that the seller's equity is negative, of not understanding the state laws sufficiently and the implication of redemption periods, of stiff competition from fast moving experienced buyers for the cream of crop, of failing to spend wisely on good advice- from appraisers, title search companies, a realtor who really knows the neighborhood and has experience with foreclosure sales, just to name the most important counsellors.

The bottom of the housing cycle doesn't arrive that often in an investor's lifetime, and there are those that argue the best deals could come a little later. That's just one more decision that you take based on your risk profile. There could be more than two bites of this apple, stretching your dollar with a great discount when you purchase the foreclosure, generating cash inflow from an affordable rental property, and then selling in 4 or 5 years when prices are steadily rising once more.

Foreclosures
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 

» More on Foreclosures