Bank Foreclosures Lure Investors

By: Philip. Smith

You are going to put your spare cash on the line and venture into an initial investment in one of those bank foreclosures in town. Your goal is to buy at the best discount you can negotiate, with a budget fine-tuned to cover adequately those likely repairs, and to top up your net profit with a sale back into the same price flattening market. Without losing your shirt that is.Good foreclosure listings services will provide you with leads, take away the tedium of the initial information gathering exercise. You know your own informed research is essential don't you? Here are some tips on essentials that you just don't want to miss.Why is the time right now for investors to be sure of a really good discount?There are two compelling reasons; the amount of pressure generated by each varies according to the rate of foreclosure filing in that particular city or county and the number of properties failing to sell in pre foreclosure or at auction.

Clearly the more bank owned property in town, the more the banks will be prepared to negotiate on price, the more they discount. If, at last in your area, the heat has gone from price appreciation, it's now a buyers' market and the lending business is dropping off, then you can bet on a reasonable level of discounting.Remember that at this end of the foreclosure process, the owner was once the lender with yet another loan in default. What's the carry value of that property in the bank's books likely to be? Original debt of late payments plus accrued interest and charges, then maybe some additional costs of a failed auction (and those won't be small). The bank has wriggle room.How to get a head start on competitors? Make your offer all cash and with the minimal number of conditions.Knowing how to set your offer price is a basic requirement. There is no time to learn this after you have found that apparent gem!When you are targeting bank foreclosures you concentrate only on the relevant issues like getting the complete property information and analysing current comparable sales. You certainly can no longer rely on averages or estimates and you can move faster if you learn how to do this yourself by subscribing to a database of accurate county real estate data and checking out your local MLS.

Foreclosures
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