Investing

Josh Sloan asked:


Right now, there are more opportunities to purchase houses in foreclosure than ever before. Contrary to what you might see on late-night TV or on websites offering information on HOW *YOU* CAN GET RICH WITH FORECLOSURES!!!, investing in foreclosed properties is not a get-rich-quick scheme. It is, however, a get-rich-slowly scheme - *if* you love working with houses, improving them and marketing them, *if* you have a steady cash flow already and *if* you are aware of the legalities of the system and how to make them work for you.

Some people might tell you this is easy money - usually with an expensive seminar or CD attached. However, while foreclosure investment can result in a profit, the unbridled flow of riches just aren't going to happen. You may get lucky with one house and make some money, but this isn't going to happen all the time, nor is it something you can bank on making a steady flow of income with until you accumulate enough knowledge and experience to predict which house is going to be the next 'diamond in the rough'.

Your best bet is to engage the services of a Realtor® who specializes in foreclosure, at the very least, for your first foreclosure investment. Your Realtor® can guide you through the ins and outs of the legal system, help with paperwork, and do the research on foreclosed homes that can net you the best home for your dollar. They also can guide you to publications, educational materials and other tools that you can use in your search for the next foreclosure.

Foreclosures can also be an emotionally harrowing experience, not to mention financially, for the people who have to deal with evictions and/or vindictive former owners. Some former homeowners continue living in 'their' home for as long as they can, even after the eviction papers have been sent. An experienced lawyer can help you with the legalities entailed in eviction. Some people may be spiteful enough to damage or strip the property. Some may even leave behind pets that will damage or foul the property and, if not found in time, die from lack of food and water.

Assuming that you're buying an empty foreclosure, you need to have a good idea of how much is required to get the home back into sellable condition. If you are not proficient in assessing a home, obtain the help of a professional who can go through the home and give you an estimate of what needs to be done. Paint and new carpets are one thing; having to completely rewire the house is quite another!

Allow for a significant chunk of time to do repairs/oversee repairs and improvements. If you are doing a lot of this yourself, you will probably have to devote most of your free time to this endeavor, which can eat into family and friend commitments.

Also, consider what's going to happen when the mortgage is due. You must be able to carry the house for a few months on your own money if repairs take longer than anticipated or if the housing market takes a downturn. If you cannot make the payments due to the fact that you were depending on a quick sale, you'll be in the same position as the people who formerly owned your home.

Another issue with foreclosure is the laws of your state. Some states allow owners to 'buy back' their homes for up to 30 days after a court-ordered auction. Be wary of foreclosures in states that allow this and make sure that the house is definitely yours before you start making improvements.

Investing in foreclosures is not always easy money. There are many pitfalls into which the novice buyer can stumble - even if the buyer has bought other types of properties before. A foreclosure is different. However, with the help of a knowledgeable Realtor®, you can be on your way to a new and potentially profitable hobby.



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Sharkbaitsoftware .com asked:


Foreclosure is the legal proceeding in which a bank or another creditor sells or repossesses real estate due to the owner's failure to comply with an agreement between the lender and borrower ( the 'deed of trust'). Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is referred to as "the lender has foreclosed its".

There are two sorts of foreclosure in most common law states. Using a "deed in lieu of foreclosure" the bank claims the title and possession of the property in full satisfaction of a debt, usually on contract. In the proceeding known as foreclosure , the property is auctioned by a county sheriff or some an officer of the court. The sheriff then issues a deed to the winning bidder. Banks and other institutional lenders typically bid in the amount of the owed debt at the sale, and if no other buyers step forward the lender receives title to the immovable property in return. Some states have adopted non-judicial foreclosure procedures, in which the mortgage, or more commonly the mortgage's attorney or designated agent, gives the debtor a notice of default and the mortgage's intent to sell the property in a form prescribed by state statute. This type of foreclosure is commonly referred to as "statutory" or "non-judicial" foreclosure, as opposed to "judicial". With this "power-of-sale" type of foreclosure, if the debtor fails to cure the default to stop the sale, the mortgage or its representative will conduct a public auction in a similar manner as the sheriff's auction. The highest bidder at the auction becomes the owner of the immovable property free and clear of any interest of the former owner but the property may be encumbered by any liens superior to the mortgage being foreclosed (e.g. a senior mortgage, unpaid property taxes etc). In some cases further legal action, such as an eviction may be necessary to obtain possession of the premises.

Strict Foreclosure is an equitable right available in some states. The strict foreclosure period arises after the foreclosure sale has taken place and is available to the foreclosure sale purchaser. The foreclosure sale purchaser must petition a court for a decree that will cut off any junior lien holder's rights to redeem the senior debt. If the junior lien holder fails to do so within the judicially established time frame, his lien is cancelled and the purchaser's title is cleared. This effect is the same as the strict foreclosure that occurred at common law in England's courts of equity as a response to the development of the equity of redemption.

In most jurisdictions it is customary for the foreclosing lender to obtain a title search of the immovable property and to notify all other persons who may have liens on the property, whether by judgment, by contract, or by statute or other law, so that they may appear and assert their interest in the foreclosure litigation. In all US jurisdictions a lender who conducts a foreclosure sale of immovable property which is the subject of a federal tax lien must give 25 days' notice of the sale to the Internal Revenue Service : failure to give notice to the IRS will result in the lien remaining attached to the immovable property after the sale. Therefore, it is imperative that the lender obtain a search of the local Federal Tax Liens so that if the persons or companies involved in the foreclosure have a federal tax lien filed against them, the proper notice to the IRS will be given.

Some individuals and companies are engaged in the business of purchasing properties at foreclosure sales. A number of companies promoting themselves on the internet and in other advertising media have sprung up touting the profits that can be made buying properties in foreclosure. Purchasing properties in foreclosure can be a "risky business" and should not be attempted by the uninformed. Read books on foreclosure investing and purchase a good foreclosure investment software to protect yourself from buying the wrong foreclosure properties.

For more information visit www.sharkbaitsoftware.com



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Gary Jezorski asked:


These days you can't go too long without hearing about the housing bubble burst and the slew of foreclosures taking place in the US. With so many homeowners facing foreclosure the market is ripe for both seasoned and novice investors.

The opportunities to invest in foreclosed properties develop when property owners fail to complete a series of monthly payments, forcing the bank to reclaim the home. The house will then be put up for sale at a bank auction where investors can bid on the property. You can get bank auction information from a variety of online sources.

The buyer's market generated by massive foreclosures allows investors to negotiate much better deals for their target properties. Since homeowners want to avoid foreclosure and are usually pressed for time they are willing to significantly drop the cost of their properties.

In most cases they are trying to sell the home in a very short time span of sixty to ninety days, and a quick sale could save them from further financial difficulties.

There are different strategies for investing in foreclosures and people should stick to the one that most reflects their investment goals. When scouting the market for foreclosed homes there are many resources that you can rely on, some free and some costly.

One option that foreclosure investors have is paying for a foreclosure listing service; many websites offer these for a low monthly fee.

However, since this information can be obtained for free many investors choose to do their own legwork and get these lists directly from lenders or county record offices.

For the most part the results are the same, although if you do get a paid listing service make sure to research the company as some have more up-to-date lists than others.

Another great resource is a local realtor, if you have the option cross reference your lists with the realtor's knowledge of neighborhood statistics.

They can help by telling you valuable information such as what price ranges houses have been selling at in specific areas. Also be sure that the person you're working with has your best interests in mind and not their own.

Overall, buying and selling foreclosed and pre-foreclosed homes can be lucrative investment opportunities. Just make sure to take your time and complete thorough research on any opportunity before you fully commit to a project that you might not be able to handle.



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Jeanette Fisher asked:


Investors love to make a high return on their money. That's why so many millionaires invest in real estate. You can leverage your money using other peoples' money when you finance real estate.

Many real estate investors make $5,000 to $10,000 or more by flipping houses. These investors buy a home from a distressed seller and resell it quickly for a profit. Just because a seller has serious problems like a pending foreclosure or divorce doesn't mean the house is a fixer. Many distressed sellers offer prime houses in perfect condition discounted for a quick sale.

Distressed sellers jump at the chance to get out from under their overwhelming problems with an offer to close in ten days. To purchase a home quickly, you need to be prepared to offer cash or a have secure loan in place with a reliable mortgage lender.

Other real estate investors prefer to buy fixers from distressed sellers. Distressed fixers present the best bargains to make the highest return on your money. For instance, if you put 5% down on a $200,000 home, spend $5,000 fixing the house up, and another $3,000 in payments, your cash investment totals $18,000. If you sell the home for a $70,000 profit like many rehabbers, you can see that your return on your investment of $18,000 for two months exceeds most other types of investments.

This investment plan assumes that you have the knowledge and skills, time to work on your fixer, and that you sell the house as soon as its finished to a qualified buyer. Home improvement centers help you with how-to classes, brochures, and advice. You need to give up your free time--TV, parties, leisure activities and work on your fixer. You could hire workers, but contractors and laborers work slowly and eat up your profits.

The last part of the equation, selling your house quickly to a qualified buyer means you need to do your homework. Many investors seek free help from a loan officer to price the house right and to qualify their buyers. These investors earn the sales commission by selling their houses by owner.

The most important issue, how you fix up your house, ensures that you quickly attract a buyer willing to pay top dollar for your transformed property. Investors using Design Psychology strategies for fixing houses sell their homes, for more than the asking price, three hours after putting the yard sign out.

Whether you want to make money investing in real estate by flipping or fixing houses, you need to understand your market. To get started in your real estate business, go house shopping. You'll soon learn how to pick up a flip or a fixer and be on your way to making a high return on your money.

Copyright © Jeanette J. Fisher.



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