Profit From Bank Foreclosures - Buy Yourself or Join REIT
Advice on Buying Foreclosed Properties
As a Canadian, have you ever considered buying residential foreclosure? If you have the money to invest, it could be a wise decision do so. First make sure you research the best ways to invest in foreclosed properties to lower your risk and increase the likelihood of profiting.
Decide what stage of the foreclosure process you want to be involved in. The options are pre-foreclosure, sheriff's auction, and repossession stage (referred to as REO which stands for Real Estate Owned by the bank).
If you are buying real estate directly, bank-owned properties are the safest route. Sheriff's auctions usually have the lowest priced houses, but you need some experience in order to make the most of these opportunities. The houses in a Sheriff's Auction are usually not available for inspection, so it's easy wind up with a lemon that costs more than you ever make as a return on investment.
A Repossession takes place when the bank is not able to sell a house at auction. The best deals are available in Repossessions, and you get a clear title and an inspection to avoid surprises. Also, lenders who sell these homes may have already made some repairs and can also offer good financing terms. Still, the houses are still often sold in "as-is" condition.
Always have the home inspected by a professional. Never underestimate the costs involved in repairing a faulty house, and always add in a 10 percent cushion for extra repairs.
Look for foreclosures in areas that do not have many other foreclosures as there is likely to be a stronger market as the economy recovers. Make sure you have your financing in place before making an offer. Also, keep in mind that being pre-qualified is not the same as being pre-approved, and only pre-approved means you are ready to make an offer.
As a Canadian, have you ever considered buying residential foreclosure? If you have the money to invest, it could be a wise decision do so. First make sure you research the best ways to invest in foreclosed properties to lower your risk and increase the likelihood of profiting.
Decide what stage of the foreclosure process you want to be involved in. The options are pre-foreclosure, sheriff's auction, and repossession stage (referred to as REO which stands for Real Estate Owned by the bank).
If you are buying real estate directly, bank-owned properties are the safest route. Sheriff's auctions usually have the lowest priced houses, but you need some experience in order to make the most of these opportunities. The houses in a Sheriff's Auction are usually not available for inspection, so it's easy wind up with a lemon that costs more than you ever make as a return on investment.
A Repossession takes place when the bank is not able to sell a house at auction. The best deals are available in Repossessions, and you get a clear title and an inspection to avoid surprises. Also, lenders who sell these homes may have already made some repairs and can also offer good financing terms. Still, the houses are still often sold in "as-is" condition.
Always have the home inspected by a professional. Never underestimate the costs involved in repairing a faulty house, and always add in a 10 percent cushion for extra repairs.
Look for foreclosures in areas that do not have many other foreclosures as there is likely to be a stronger market as the economy recovers. Make sure you have your financing in place before making an offer. Also, keep in mind that being pre-qualified is not the same as being pre-approved, and only pre-approved means you are ready to make an offer.