Investing in Foreclosures
Investing in foreclosures can be a complicated manner if you do not understand exactly what you are getting into, but many real estate investors are making more money than you can imagine buying up foreclosure property.
When you begin to look into purchasing foreclosures, you should first look at the real estate market in the area in which you are wishing to buy. Study what the properties sold for and how long they were on the market. If you desire to be a real estate investor, you should know the local market.
Another good person to talk with if you are just starting to invest in foreclosures is a foreclosure attorney. They understand all the laws and other pertinent information regarding purchasing foreclosure property.
You should also learn about the redemption period. Some states have what is called redemption. What this means is the owner of the foreclosed home has up to six months to buy back his property. This can even be longer if the home was purchased prior to the change in law stating 6 months. At one time, the redemption time was one year. If you are in a redemption state, this law then you will also be stuck with the redemption policy. What this means to the new buyer is that they will not be able to sell this property until the redemption time is up whether that be 6 months or one year. Also, remember if you do any type of improvements or remodeling and the original owner buys back the property you have lost not only the investment but also all of the money you put into the property.
Once you have bought the mortgage you will want to get the original buyers to deed to you in lieu of a foreclosure. This is done by offering them money to move out and foreclose on them. If there are people living in the home that you purchased and you wish for them to move you can always turn
to offering them an allowance for their move. This may be the best way in which to get them to move so you can go on with improvements or selling of the property. Start with say $1500 if they move in one week, $1000 if they move in two weeks, $500 if they move in one month.