Foreclosed Real Estate Do Distressed Properties Make For Smart Investments

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span                            not have liens attached.
class="cap">Foreclo     Occasionally, the foreclosed
sed real estate can be one      homeowner still resides in the
f the smartest investment             home. The liens must be removed
decisions you'll ever make.           and the homeowner evicted before
However, it's not quite as easy       you can take possession of the
as the late-night infomercials        home. This can be a tedious and
suggest. Before plunking down         sometimes volatile process.
your hard earned cash you should      Therefore, it's critical to
educate yourself about the pros       engage in due diligence prior to
and cons of investing in              making an offer on foreclosed
distressed properties. The            real estate sold through
following tips can help you           auctions.

understand the facts and be

When foreclosed properties are
prepared for what lies ahead.         not sold through auction, they
When real estate is foreclosed it     are given back to the bank. At
must first be placed for sale         this point, property is referred
through a foreclosure auction. In     to as "real estate owned" (REO)
order to buy auction property,        or "bank foreclosures." Once the
individuals are required to place     bank retains ownership of the
a minimum bid equal to the            real estate, the mortgage note no
balance due on the mortgage note,     longer exists. Oftentimes, the
along with any accrued interest,      bank negotiates with lien holders
tax or creditor liens, attorney       to reduce or remove liens
fees and other costs associated       attached to the property. The
with the foreclosure process.

bank will evict persons residing

In many instances, more money      in the foreclosed property, if
is owed on the home than it is        necessary and may invest in
worth. It is rare to find             repairs and renovations.

foreclosed real estate that does

Bank owned real estate may or

may not be a smart investment.        not mean you should not include
Engage in due diligence and           the cost of your time in the
thoroughly investigate the            proposal.

property prior to making an

If you are the handyman type
offer. Start by conducting market     and able to make repairs
research to ensure the price you      yourself, investing in distressed
pay is comparable to other homes      properties can be quite
in the area. The goal is to           profitable. However, if you have
purchase REO properties               to hire contractors to conduct
significantly under market            the work for you, it can
value.

seriously cut into your profit

When viewing distressed margin.

properties take along a note pad,

Real estate owned foreclosures
digital or video camera and make      are purchased directly from the
note of necessary repairs. Most       bank. Keep in mind that banks
foreclosed real estate is sold        want to obtain the best price
"as is" and this can work in your     possible and keep losses to a
favor. The more required repairs,     minimum. Generally, banks have a
the more negotiating power you        Loss Mitigation Department who
possess.

handles REO properties. Many

Obtain estimates to determine      banks list their foreclosed real
the costs of repairs and              estate on their company website.
renovations. If you plan to do        The name and contact information
the work yourself, determine the      for the loss mitigator is usually
length of time it will take to        posted with the property
complete the repairs, along with      description.

the cost of materials. Factor the

A lesser known, but more
cost of your time and materials       profitable way to invest in
into your offer. Just because you     foreclosed real estate is to
conduct the work yourself does        locate private investors who

purchase bank portfolios. By profit by investing in distressed
purchasing distressed properties properties.

in bulk, investors buy at             gend>About the
wholesale prices. They then pass      Authoralong their savings to                id="authorbio"
individuals who purchase the          class="membersnoticewhite">Receiv
property. Whether for personal        e free real estate investment
residence or investment purposes,     tips from Simon Volkov, a private
it is not uncommon to buy             investor who specializes in foreclosed homes from investors       href=http://www.simonvolkov.com/i
for 70- to 80-cents on the            nvestors/>foreclosed, bank
dollar.

owned and probate properties. His

Regardless of the method you       expertise in distressed
choose, foreclosed real estate        properties is far above the rest.
can be risky. However, if you         For more information visit take time to understand the           href=http://www.simonvolkov.com/>
process and conduct due               www.SimonVolkov.com.

diligence, you can make a tidy ieldset>