4 Tips for Buying Foreclosures With No Money Down
Buying foreclosures with no money down is becoming the norm for a lot of savvy investors. This is because there are a lot of opportunities out there to buy property without making a hefty investment. There are even some programs from the US Government directly facilitating people who can’t qualify for a bad credit home loan to buy their first home and make it a positive decision for them. The recent experience with the banking credit epidemic is proof that you can’t buy it on the open market with conventional financing and that the only way to buy property is with creative financing.
Where you buy property is a big consideration in whether you can buy it with no money down. If you can get yourself a property below market value, it is probably cheap enough to be worth your while to deal with and expect a higher profit as well. It could be a strategy to fix up the property however it makes most sense to purchase something that doesn’t really need much work once you have it financed. I advise people who are interested in buying foreclosures to consider purchasing a house that requires some work. This is because there are some great deals right now in the market that can be bought inexpensively.
The quality of the foreclosure is important too. Don’t buy a place that has termite damage or has been vacant for years. Although it may seem like a foreclosure in the market, you want to work with the bank to get the necessary assistance to take care of the property. This will probably include some repairs but it is well worth it if you are considering buying an expensive property.
In your search for foreclosures, you need to consider some of the intangibles. It will be better if you don’t ware the house for any longer than a few months. A repossessed house shows some wear and tear and you will need to repair this in order to resell the house later. Although it may be an easy fix, you probably don’t want to buy a house for a second time and have to spend cash on big repairs for it. Look for a house that does not need a lot of work that you can be able to do for it yourself. Sellers will be apt to make any needed repairs for you as a way to get rid of the house.
In your evaluation process, look for low amounts as well. When a bank has a lot of repossessed houses to get rid of, they may be offered an amount that is below market value. The bank would need to offer very low prices in order to get the property off of their hands. This means that you can find a house that is discounted heavily but make sure that its increase in value is still worth the purchase and repairs that you have had to make.
To make money buying foreclosures, you have to be smart about it. Do as much research as you can to know what you are getting into. Study as much as you can about the market and the properties you are considering. This will allow you to negotiate with the seller and you will know if it is a seller’s market and if you are able to make money buying the house.
With the risks, headaches and possible scams of buying properties, you need to make sure you are well educated. You have to make sure that you are working with a business person or it will cost you thousands of dollars or worse. Look for someone who makes you feel comfortable. It is important that you build a bond with the person who is negotiating the deal with the seller. The reason is that you will be in contact with the person. You will get the feel of their personality when you sit down with them. You need to know that they are trustworthy and that you can trust them.