Home Foreclosure Facts
Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. It begins when a borrower/owner defaults on loan payments and the lender files a public default notice.
Do your homework. Calculate how much you'll need to sink into the property, outside of mortgage and tax payments. Necessary renovations, upgrades and other expenses can pile up and eat into your profit margin.
Planning to flip? People can, and do, buy foreclosed houses cheap so they can fix them up for quick resale. If you get a steep enough discount and do your homework on the price of repairs, flipping foreclosures has earning potential. But if you're not careful with your real estate flips, your investment strategy could produce a sizable payoff for an unintended partner: the Internal Revenue Service with a tax of +15%. That why it pays to work with a seasoned agent that knows the market and your potential return of investment.
Be A Landlord? Many investors now are focusing on properties they can rent out for several years, so they can benefit from price appreciation when it eventually returns.
Have a Proof of Funds Letter or be Prequalified-Whether you use cash, a home equity line of credit, resources from other investors or mortgage products, secure the money for your purchase in advance. Sellers, in the case of foreclosures, the bank, only want to work with serious buyers who are ready to buy quickly. You could miss an opportunity if you don't have your financing in place.
Buying an REO (Real Estate Owned) property
Buying Real Estate Property : How to Buy a Foreclosed Property
Real Estate Tips : How to Buy Foreclosed Homes