13 Mar
Posted by Louis Hook as Real Estate foreclosure
Of all the ways a person can lose a home, foreclosure is the worst. It destroys their credit, is an embarrassment to their family, and strips them of their dignity. If they can no longer afford to keep up their mortgage payments, they do have alternatives. One is the ‘short sale’. This option is applied when a lender agrees to do a ‘short sale’ in real estate. It simply means that the lender will accept less than the total amount due on the mortgage/property. Very few lenders will do this as it usually makes more sense to foreclose. However, if you can find one of these homes, you can usually get a bargain!
Real estate foreclosure sales are profitable to you because you can buy low, repair or remodel as needed, and then usually turn around and sell the home for much more than what you have invested in it. This has becomes very popular and is referred to as ‘flipping’.
Imagine if you will that you have the ability to purchase a home, even if you have one of your own. You find a great home, one that with some remodeling and a few repairs will be highly marketable. If this happens to be a real estate foreclosure, you might be getting an even bigger bargain. Let‘s say that you purchase the home for $100,000 and put another $35,000 in renovations/remodels and repair. You have now invested a total of $135,000. If it is located in the proper neighborhood you might easily sell the home for $150,000 or more. This will mean a very reasonable profit for you.
However, not all ‘flips’ will net you a high return on investment so it is important that you take great care and research thoroughly any property you are considering for investment whether it is a real estate foreclosure sales or not. Consider the cost to purchase the property, the costs or repairs and/or remodels, and the neighborhood. What might seem like a good idea now may turn out to be a nightmare! It could wind up costing you more than it was worth. Of course, one ray of hope in the real estate foreclosures sales market is that if you can walk away in the end with at least some profit—even if it is only a few thousand dollars or less—at least you made a profit or broke even. If this is not possible it might be best to walk away from the real estate foreclosures sales property you are considering.
Although it does happen everyday, not everyone can be as lucky as to acquire a property for $100,000, put another $35,000 into it and then sell the real estate foreclosure sales property for $450,000.
