Many people are either losing their homes to foreclosure or walking away because it doesn't make sense for them to keep making expensive mortgage payments, when the house is worth less then the remaining mortgage. Currently 50% of home sales across the US are foreclosed homes. Although the real estate crisis is worrisome for homeowners, it is providing opportunities for families and investors.
Donald Trump is a great example of someone who was investing in real estate during a downturn in the market. Now look at him! "There are always opportunities", he is quoted as saying. "When I first started out in Manhattan, everyone was saying what a terrible market it was". He admits if he had listened to the nay Sayers he won't be were he is today.
Many of the top real estate investors, including Mr. Trump, now feel that this is currently a good time to invest in real estate by purchasing pre-foreclosed or foreclosed properties.
The great thing about buying a pre-foreclosed home is that you are dealing one-on-one with the owner and have a chance to ask questions and inspect the house. Since the bank has time to evaluate the property there is a higher probability of being granted a mortgage.
When looking to purchase a pre-foreclosure you also need to pay closer attention to the macro aspects (I'll cover micro aspects in a later article) of the property in order to limit your risk as much as possible. Some of these property macro aspects are:
- Look around the neighborhood to see how many homes are being foreclosed. It's best that the house you're considering for purchase is the only one facing foreclosure. Obviously the more homes in forced sale, the more likely the properties will depreciate.
- Ask around to find out what the average rate for rent is in the neighborhood and if it has changed lately. This will indicate if local housing demand is on the rise or not.
- How strong is the economy at the town and county levels? Is the current employment rate growing or stagnating?
- Contact the local government to find out about any upcoming infrastructure plans. Plans such as new building permits, train lines, shopping centers and corporations establishing a local presence, would be a good indication of community growth.
- Consider the age of the majority of the population within the community. If the majority of the local population is seniors that own homes, that could translate into an excess of future housing as they move into elderly care facilities.
If you do your homework and find the majority of these answers to portray a positive community, then you should consider buying in that area. Buying pre-foreclosed homes at the right time in the right place can prove to be a very profitable venture.
Donald Trump is a great example of someone who was investing in real estate during a downturn in the market. Now look at him! "There are always opportunities", he is quoted as saying. "When I first started out in Manhattan, everyone was saying what a terrible market it was". He admits if he had listened to the nay Sayers he won't be were he is today.
Many of the top real estate investors, including Mr. Trump, now feel that this is currently a good time to invest in real estate by purchasing pre-foreclosed or foreclosed properties.
The great thing about buying a pre-foreclosed home is that you are dealing one-on-one with the owner and have a chance to ask questions and inspect the house. Since the bank has time to evaluate the property there is a higher probability of being granted a mortgage.
When looking to purchase a pre-foreclosure you also need to pay closer attention to the macro aspects (I'll cover micro aspects in a later article) of the property in order to limit your risk as much as possible. Some of these property macro aspects are:
- Look around the neighborhood to see how many homes are being foreclosed. It's best that the house you're considering for purchase is the only one facing foreclosure. Obviously the more homes in forced sale, the more likely the properties will depreciate.
- Ask around to find out what the average rate for rent is in the neighborhood and if it has changed lately. This will indicate if local housing demand is on the rise or not.
- How strong is the economy at the town and county levels? Is the current employment rate growing or stagnating?
- Contact the local government to find out about any upcoming infrastructure plans. Plans such as new building permits, train lines, shopping centers and corporations establishing a local presence, would be a good indication of community growth.
- Consider the age of the majority of the population within the community. If the majority of the local population is seniors that own homes, that could translate into an excess of future housing as they move into elderly care facilities.
If you do your homework and find the majority of these answers to portray a positive community, then you should consider buying in that area. Buying pre-foreclosed homes at the right time in the right place can prove to be a very profitable venture.
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To find the best pre-foreclosure sites the Internet has to offer check out government auctions review or go straight to pre-foreclosures
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