How to Invest in Cheap Foreclosure Homes
Now is the best time to invest in cheap foreclosures. The market is riddled with properties that are selling at far less than their original values.
For the new investor, starting with cheap foreclosure homes leaves them with a plethora of properties from which to choose. Lending practices have become more stringent with the advent of the worst real estate market post The Depression. As a result, many homebuyers who seek traditional mortgages for homes as their primary residences have trouble finding a mortgage -- even those with ideal credit. However, banks are slowly easing back into lending money but with stricter criteria and higher down payment requirements.
The Cost of Cheap Foreclosures
For the new investor, who doesn’t mind using a little rehab muscle with a partner or two, purchasing cheap foreclosures in cash can be a sound investment decision that can lead to a positive cash flow portfolio in no time at all. For example, three people can band together and decide they want to invest in foreclosure homes for less than 10K in many parts of the country. This figure can include closing costs and initial minimum purchasing outlay (appraisal, home inspection). That's less than $3,500 per person they'd each have to produce.
Tons of Low-cost Foreclosures on the Market
The country is riddle with REO inventory that banks would love to sell for less than $10K. For example, in Atlanta, Georgia alone, to-date, there are 80 properties on the market for 10K or less, including single family homes, condos, and multi-family units (small apartment buildings and duplexes). And this only includes Fulton and a few other counties. Atlanta has 28 counties in its geographical makeup. If you push the asking sales price up to $25K for research purposes, Fulton County alone has 431 properties on the market for $25K or less.
And banks are accepting much less than the asking price to move their REO inventory quickly. According to an article on RealtyTrac, a leading foreclosure statistical website, pending sales of U.S. homes (existing homes) just recently dropped by 2.6 percent. Banks are eager to negotiate, so a home listed for $25K can be purchased for much less.
The Market will Rebound
Real estate is cyclical; the market will rebound and savvy investors who have the foresight to invest in foreclosure properties can position themselves for a solid retirement with continual income.
Rehabbing and Renovating
After the purchasing of a cheap foreclosure, it will be time to renovate or rehab. There are so many out-of-work contractors and skilled laborers as a result of this real estate fiasco. Rehabbing costs are fractions of what they used to be; investors will have a deep pool of skilled labor from which to choose.
Sweat Equity
Further, investors themselves can dive in and perform much of the manual labor (yard work, painting, ripping out sheetrock, etc.,) to prepare their homes for rental via programs like Section 8, a government subsidized rental program that can be a win-win for landlords -- guaranteed electronic rent payments each month.
Key to Investing In Cheap Foreclosure Homes
The key to remember when you invest in foreclosure properties is to buy homes that don't need a lot of work and to buy homes low -- ideally those less than 10K. The result can be a home that is paid for "free and clear" that can bring in "free" rent to the investor for the rest of his or her life.
Righting the Market and Appreciation
The bonus you will gain as you invest in foreclosure properties (cheap foreclosure homes) at this crucial time in the market is two-fold: (1) the investor is helping to get the market back on its feet; and (2) the faster that happens, the faster real estate will start to appreciate in value, which is a win for those who start the invest in foreclosures process now. Imagine owning a $200K home, with no mortgage, free and clear, that pays you a salary every month for the rest of your life.
Ready, Set, Invest!
Are you ready to gain control of your financial future? Invest in foreclosure properties. Start scouring the internet, driving around your city, and talking to friends, family and colleagues about investing in cheap foreclosures. Then, locate a professional Realtor® who works with investors, and go for it. You'll be glad you did. Ready, set, invest!
Check back often for leads on Foreclosed Atlanta Homes and information on purchasing Cheap Atlanta Foreclosures! Also visit Foreclosure Millionaire Blog for More Leads and Info on Purchasing Foreclosed Atlanta Homes!
Blog by Cassandra Black
Follow Cassandra Black on Twitter Cheap Atlanta Foreclosures
Author of How to Start a Foreclosure Cleanup Business
Author of Pricing Guide for Foreclosure Cleaning & Real-Estate Service Businesses: How to Price Jobs for Profit eBook
Author of How to Invest in a Home for Under 10K and Have a $45 Per Month Mortgage Payment!
Publisher of How to Start a Foreclosure Cleanup Business: FREE Articles & Advice Blog
