A first look at bank foreclosure homes, your thoughts please?
Question:
I have enough capital and credit to buy a couple of units, one to rent out.
What other advantages is this market likely to offer me?
Answer:
Purchasing REO directly from a bank is one of the most popular ways to buy a foreclosed property. And there's plenty of competition so you may find it more difficult to get a property below FMV at this end of the foreclosure chain of events, though not impossible in some counties. The advantages over other foreclosures are that the bank will clear the title and there will be no previous homeowner or tenants to be evicted.
Another advantage a bank owner has is financing flexibility. It's really worthwhile the buyer negotiates around the four factors; price, downpayment, rate of interest on any mortgage offered, and closing costs. Don't be shy in giving your reasons why the bank should lower the price.
And I agree wih one of your expert answers, for the type of property you have indicated, HUD homes could be of great interest to you.
You can find both at the source I have quoted.
There are no bargains in bank foreclosures and certainly no need to pay for any lists. Banks are not stupid - they want as many bidders as possible and are eager to advertise foreclosed properties and use brokers. There are always lots of bidders, and I have never seen one go for below market. The real problem is that foreclosed properties usually have not been maintained and have large rehab and fix-up costs and often. hidden, expensive defects.
Foreclosed homes are usually run down but some are good. The couldnt make any payments so they let the house be trashed and didnt maintain it. If you purchase one and want inspections done, all utilities will have to be turned on in your name and you will be paying for them.
You can get nice houses for cheaper prices but thats not always the case. Just make sure you look at the house and make sure the foundation/plumbing/electrical is all good or your going to spend a few bucks getting all that fixed.
I don't like doing bank foreclosures, because the banks have so many bidders, that they will invariably get more than their asking price every time. I prefer a different approach...HUD owned properties. Go to the website www.homesales.gov and you can search by city for HUD and VA owned properties. Usually, they come with built-in equity, and have very few things wrong with them. Incidentally, I do loans in Florida, and have had a lot of experience doing HUD props. Shoot me an email if you want me to help you finance your business venture.
Forget bank foreclosures. You will NOT get a bargain.
You will get "clear" title to ANY house you buy by getting title insurance.
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