Foreclosure Homes Where Makeover Magic Pays Off

By: philip smith

Every step you take to restore your newly bought bargain from among the many foreclosure homes you searched increases its value. But you know that you can't have it both ways. With your first foreclosure investment you took advantage of a buyer's market to test your negotiating skill, you can't expect it to be so easy to sell back into that same market. Its late summer, maybe you should have waited till spring to buy. Conservative pricing, the ability to ride out a longer time to hold, knowing that you have bought the right type of housing, the most in demand, and have a budget for some aggressive marketing pointed at a retail sale, are all sensible decisions that mean you have been prepared for today's housing market.

It was tempting to buy lower priced housing for affordable rental income, there is an increasing demand spurred on by those same families coming out of foreclosed homes, but you needed to build cash quickly so decided on a buy, fix and sell strategy for starters. Not so much of a fix though, to reduce risk on this, your first foray into foreclosures investing. Maybe rental is plan B if plan A doesn't work out so well.

Why did you choose to target a pre foreclosure over the safer newcomer's option of REO? Mainly because, although house prices have flattened in the county of your choice, banks and mortgage companies are still placing their inventories with MLS at near full market value, if you allow for fundamental repairs. Somewhat surprisingly there were several opportunities among houses awaiting auction where you could identify some equity.

Back to your bargain, the roof, foundation, and wiring are fine, no termites and you have a certificate to prove that, you needed a plumber and struck it lucky there that a family friend was available immediately. You had to replace some bathroom hardware, light fittings, most of the kitchen and bathroom cupboards but that was a chance to modernise and lighten up. The kitchen is now as new. There's a window to replace, a wood floor for refinishing and you have a builder closing in the porch. So now its time to market and get the family painting team onto the job. A fresh coat of paint inside and out, some tasteful landscaping and the ambience will change completely. Isn't it amazing how many home buyers are turned by a property reeking of neglect? Guess they just have too many demands on their time to face anything thing other than to buy and move straight in!

Foreclosures
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