In this current real estate crisis, many people are loosing their homes either because they can't make the payments or are walking away because their house is worth less then the amount owed. It was reported by CNBC on July 24 that foreclosures now represent half of all the homes sold in the US. Although this is downright scary to a highly leveraged homeowner or speculator this is also an opportunity of a lifetime for anyone looking to buy real estate at these depressed prices.
If you look at any successful real estate investor, they have accumulated much of their wealth by buying when there was a downturn in the market. Donald Trump is a good example of someone who was buying up real estate real when everyone else was selling as illustrated in the quote. "When I first started out in Manhattan, everyone was saying what a terrible market it was, and if I'd listened to them, I would not be where I am today. There are always opportunities." Donald Trump.
Many of the most successful real estate investors currently see this as an opportune time to buy real estate (Mr. Trump is in this list) and see pre-foreclosures as the greatest means in which to negotiate the best deals.
The main reason to consider buying a pre-foreclosed property rather then waiting until in becomes a foreclosure property is because that way you can buy it from the current owner. This will give you more time to inspect the home as well as developing a mortgage with the bank.
There are macro (local community, etc.) and micro aspects to take into consideration when looking for a pre-foreclosed home. Here are the some of the macro aspects:
- 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.
- Check with the local tenants to see what the rent levels are and whether they have been increasing or decreasing over the last little while.
- How strong is the economy at the town and county levels? Is the current employment rate growing or stagnating?
- Check with the local government to see of any upcoming infrastructure projects that will be taking place within 2-3 years. Projects such as new shopping malls, highways, train/subways lines, building permits for new businesses being established, new parks near the property, etc.
- Demographically if there is a high number of elderly people living in town who are home owners, then there could be an over supply of housing in the future, as they move in with family or nursing homes for care.
If you do your due diligence and find positive answers to these questions when considering a pre-foreclosure then you can feel secure that it is a good community in which to invest. Successful real estate investors buy discounted properties at the right location at the right time.
If you look at any successful real estate investor, they have accumulated much of their wealth by buying when there was a downturn in the market. Donald Trump is a good example of someone who was buying up real estate real when everyone else was selling as illustrated in the quote. "When I first started out in Manhattan, everyone was saying what a terrible market it was, and if I'd listened to them, I would not be where I am today. There are always opportunities." Donald Trump.
Many of the most successful real estate investors currently see this as an opportune time to buy real estate (Mr. Trump is in this list) and see pre-foreclosures as the greatest means in which to negotiate the best deals.
The main reason to consider buying a pre-foreclosed property rather then waiting until in becomes a foreclosure property is because that way you can buy it from the current owner. This will give you more time to inspect the home as well as developing a mortgage with the bank.
There are macro (local community, etc.) and micro aspects to take into consideration when looking for a pre-foreclosed home. Here are the some of the macro aspects:
- 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.
- Check with the local tenants to see what the rent levels are and whether they have been increasing or decreasing over the last little while.
- How strong is the economy at the town and county levels? Is the current employment rate growing or stagnating?
- Check with the local government to see of any upcoming infrastructure projects that will be taking place within 2-3 years. Projects such as new shopping malls, highways, train/subways lines, building permits for new businesses being established, new parks near the property, etc.
- Demographically if there is a high number of elderly people living in town who are home owners, then there could be an over supply of housing in the future, as they move in with family or nursing homes for care.
If you do your due diligence and find positive answers to these questions when considering a pre-foreclosure then you can feel secure that it is a good community in which to invest. Successful real estate investors buy discounted properties at the right location at the right time.
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To locate the best pre-foreclosure sites the Internet has to offer check out government auctions review or go straight to foreclosures
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