Sep
10
The Low Down on Distressed Properties for Sale
Posted By: Ramon Rivas on September 10, 2010 at 11:27 amThe Low Down on Distressed Properties for Sale
By: Joseph B. Smith
Distressed properties for sale can be purchased for up to fifty percent of their market price, and therefore could be monetarily beneficial to real estate investors who buy, modernize and then lease out or resell. These properties can be especially attractive to home buyers with background in building or construction or even those who have ties to the construction industry.
What to Consider
Distressed properties for sale are occasionally known as fixer upper homes, and usually demand purchasers to make comparatively cheap repairs. Consequently, the houses can be bought at significantly reduced rates. One major consideration when it comes to distressed properties are their locations. If the master plan is to purchase these cheap houses and resell them to turn a profit then you have to play on the other strengths the property may have. Location is definitely a big come on for buyers so before committing to buy a distressed property, make sure you have scouted the neighborhood and the general area of the property. Make sure that there are business and employment opportunities as well as schools, hospitals and other social services. The level of livability is a way to strengthen the value of your distressed property and increases its chances to attract buyers.
Distressed properties for sale can either be an apartment complex, a family house or a condo. A buyer needs to be clear on what type of property they wish to purchase and renovate for resale. One can gain a lot of insights on distressed properties from an online foreclosure listings service. This service will have a comprehensive and up to date list of distressed properties across the country. If you subscribe to this service, you can design your search according to what is important to you. These sites will also compute your mortgage and provide the main contact persons you can get in touch with for your purchase. These sites will also provide education on the requirements for purchasing distressed properties for sale.
About the Author
Joseph B. Smith has been educating buyers on the finer points of distressed properties for sale at ForeclosureDeals.com for over ten years. Contact Joseph B. Smith through ForeclosureDeals.com if you need help finding information about distressed properties for sale.
(ArticlesBase SC #3236556)
Article Source: http://www.articlesbase.com/ – The Low Down on Distressed Properties for Sale
We are real estate investors and work extensively in the pre-foreclosure market. Many times sellers are financed 100% or close to it and there is no deal to be had so we try to negotiate with their lender to do a short sale or short payoff. As part of the process the lender needs a BPO to determine fair market value.
What is a BPO? A Broker’s Price Opinion is a market value assessment usually performed by a licensed real estate agent or broker. These are most often done on properties that are in foreclosure. A lot of times when the property is not sold before or at auction, the BPO that did the opinion will get to list the property. Sometimes it can be a full time appraiser looking for extra work that may do the BPO. Because of the fact the agent may eventually get a listing they tend to sometimes give a high appraisal.
Now realize that market value generally assumes a home in great shape needing no repairs. 90% of retail buyers will not buy a home that needs any repairs. Many lenders will not finance a home that needs wood replaced or roofing done.
What is a Drive By? A drive by consists of a BPO going to the house and stopping in front, taking a picture of the outside and driving off. They never get out of the vehicle, never to see the inside or any damage or repairs needed on the property. Comparable sales, past appraisals and tax records will be used to determine the value of the home without taking needed repairs into account. A lot of houses have good curb appeal, once you step thru the front door it’s a different story. We have had the BPO agent miss the fact that a tarp was on the roof to stop the rain from coming in the house because the holes in the roof were on the back of the house and the agent never stepped out of their vehicle.
How can I get an accurate BPO Appraisal? Be there early. Bring pictures and the list of repairs from your first visit. Develop rapport and become best friends with the appraiser. Do your homework on the neighborhood. Look for true comps. Example: If you are looking at a stucco home and the rest of the neighborhood is brick. You can’t find true comps. For future reference if you are in a mid to high humidity area, get a moisture test on the stucco and bring the results with you.
How can I keep from being a victim? Arrive 45-60 minutes before appt. Do not allow the home owner to greet the BPO instead of you. Stay where you can see the road. If you see a vehicle pull up and stop, jump out and holler politely,” Would you like to see the inside of the home”? To make the experience better for yourself and the BPO offer help. Tell them what you have found. Don’t take it personally if they don’t want help from you. Do your homework. Don’t let the homeowner show them around as they will try to point out nice things. Your job is to point out the flaws of the house and drive the appraisal down. Make sure the lender knows you are the point of contact for the BPO agent and to contact you to set up the appointment for the BPO. The pictures that you took on the first visit need to be printed out; if digital take them to a kiosk that makes prints. Have 3 copies made. Put two to a piece of paper, go with colorful construction paper, yellow is a happy color, go to your local office supply store and get printable file folder labels. In detail tell what’s wrong in the picture. Give the BPO agent 1 copy. Let them know what you have found wrong with the house or yard. Give them a repair list. Any true comparable sales you have found within a 5 mile radius will also help. Always pick the lowest comps. You will document a lot more problem area’s with the house than the BPO will see. This will be the difference of making 30k or 5k on a house.
Aug
23Investing In Foreclosure And Reo Properties
Posted By: Ramon Rivas on August 23, 2010 at 1:56 pmInvesting In Foreclosure And Reo Properties
The investment quandary as to the best method for acquiring foreclosed property at heavily discounted prices inevitably surfaces at the same stage in the real estate cycle every ten to twenty years. After housing booms and home prices correct back to affordable levels, real estate investors are suddenly inundated with an almost overwhelming supply of potential homes to choose from. These prospective buyers peruse city blocks searching for evidence of distressed properties that might lead to investment opportunity by taking dead lawns, unpaid utility notices, and default notices all into account. They investigate “For Sale” signs with “Bank Owned” or “Foreclosure” riders attached. Technologically savvy bargain hunters browse websites online to identify properties in default. These opportunists also compare notes with one another at various social functions, water coolers, chat rooms, and anywhere else real estate is spoken. Here they may learn that in order to obtain the most lucrative price, investors are best served to purchase property directly at a foreclosure sale on the court house steps. Regardless of the preferred method for locating distressed properties, it is imperative to thoroughly comprehend the different foreclosure processes in order to develop and implement a successful investment strategy.
If a homeowner fails to make prescribed loan payments to the bank, the borrower is deemed to have defaulted on the loan. If the delinquent payments are not cured in a timely fashion, the lender is permitted to foreclose on the property to acquire title to the home as security for the unpaid debt. For national investors it is important to understand that lending practices and foreclosure procedures vary from state to state. For example, some states are considered “mortgage” states while other states prefer the “deed of trust” method of lending and holding title as security for the loan.
MORTGAGES
Mortgage states utilize a two party security system where a mortgagor (or borrower) provides a promissory note to a mortgagee (or lender), along with a voluntary lien called a mortgage that serves as security for the borrower’s promise to make the loan payments described in the promissory note. Since title to the property resides with the borrower when the mortgage is created, foreclosures in mortgage states can be relatively lengthy and costly for banks to pursue. Further, mortgages also provide borrowers redemption rights that allow borrowers a specified period of time after the foreclosure and ultimate sale to a third party to pay off the original loan amount and regain title to the property. As a result, buyers at foreclosure sales in mortgage states must be aware that they will often be unable to obtain clear title to foreclosed homes as the previous owner will likely be afforded the opportunity to pay off the original promissory note and reclaim the property.
DEEDS OF TRUST
A minority of states that include California favor the three party deed of trust system due to the relative cost efficiency and expediency provided to lenders in the foreclosure process. Additionally, lenders are often able to provide buyers of foreclosed property clear title as no right of redemption exists for borrowers. The Deed of Trust process involves a trustor (or borrower) that gives a promissory note to the beneficiary (or lender), and the trustor also gives title through a trust deed to a trustee (neutral third party) as security for the note. The important difference here is that title to the property is held by the trustee rather than the borrower. The trustee is typically a neutral third party designated by the lender to hold the deed of trust during the loan period with the power to more easily administer a foreclosure sale in case of default by the borrower.
It is clearly important to determine whether one is bidding on a property that was subject to a mortgage or a trust deed at a foreclosure sale. This differentiation can often be confusing as many real estate professionals and experts in deed of trust states will often casually refer to home loans as mortgages. Many lenders in these states will refer to themselves as mortgage brokers or mortgage companies when they actually originate promissory notes secured by deeds of trust. Deed of Trust states also refer to foreclosure sales as trustee’s sales, where the highest bidder purchases the property in an auction setting. However, purchasing a home at a trustee’s sale can be a risky proposition as the buyer has little or no opportunity to inspect the home prior to purchase. Further, the buyer must pay with all cash as financing is typically not permitted at trustee’s sales. There is also no guarantee that the property is not currently occupied by tenants or a previous owner. Finally, purchasers at a trustee’s sale are not protected against clouds on the property’s title like tax liens from a previous owner’s unpaid property taxes, so title insurance is often unattainable for buyers at trustee’s sales.
REAL ESTATE OWNED (REO)
If a home is not sold to a new buyer through the foreclosure process, the lender holding the promissory note will often acquire the property and attempt to sell it on the open market to a new buyer. Once title to the home that once served as security for the unpaid promissory note is transferred to the bank, the property is deemed real estate owned (REO) by the bank. The bank will then typically retain a REALTOR® to market the property for sale at a price below market value, remedy any defects on title, remove any tenants or squatters occupying the property, and often retain contractors to repair any major physical defects in existence on the property. Although the typical price paid for an REO property may in theory be slightly higher than buying at a foreclosure sale, purchasing an REO property is clearly a much less risky proposition. REO sales also provide investors adequate opportunity to inspect homes prior to making offers to purchase, and buyers are permitted to utilize financing when purchasing these bank-owned properties.
Whether purchasing foreclosed or REO properties, the various risks and rewards associated with an investment may not only depend on the characteristics of the home itself, but also the type of security the home provided to the previous owner’s lender. In order to avoid the displeasure of telling foreclosure horror stories in real estate investment circles, an ounce of diligent research into a property’s financial history can prevent a pound of investment headaches.
About the Author
Brian S. Icenhower, Esq., BS, JD, CRB, CRS, ABR, a California Association of Realtors Director, practicing real estate attorney, a real estate expert witness and litigation consultant, a prosecution consultant of Tulare County District Attorney Real Estate Fraud. He may be contacted at bicenhower@icenhowerrealestate.com, or www.icenhowerrealestate.com
(ArticlesBase SC #774513)
Article Source: http://www.articlesbase.com/ – Investing In Foreclosure And Reo Properties
Aug
17Curb Appeal is Key to Real Estate Investing
Posted By: Ramon Rivas on August 17, 2010 at 11:51 pmIf you are interested in real estate investing for handsome profits, you need to consider the curb appeal of any property you wish to rent or sell. A big part of the real estate game is buyer and tenant psychology. One thing that researchers have found about tenants and home buyers alike is that emotional response accounts for a great deal of investor success. In other words, the investors who can appeal to a tenant or buyer’s emotions — and make the tenant or buyer imagine themselves in the property — has the greatest chances of success. Curb appeal means improving the first impression that your property makes. Studies have shown that when the first impression of a property is positive, it is easier to convince a tenant or buyer to invest.
There are many ways that you can increase the curb appeal of your properties without a great deal of time and money:
1) Clean. A very tidy appearance is paramount to good curb appeal. Therefore, be sure to scrub the sidewalk, flagstones, walkway, windows, and siding. Mow the lawn, rake the leaves, clear the snow, and do everything you can to create the neatest possible appearance. You can do much of this yourself, although you may want to hire professionals or at least rent a high-pressure cleaning system for taking care of the exterior tiles or brickwork of a home. If the sidewalk outside your rental property or home is crumbled and in poor shape, you can generally contact the municipality to fix the problem.
2) Choose great colors. The color of your property goes a long way towards asserting good appeal. In general, you want to consider the colors of the properties around your property. If you are selling a suburban home, for example, located in a lot surrounded by pastel colored homes, you do not want to paint your property a right color. It would stand out too much. The right color blends well with the properties on either side of it. Make sure that the colors are fresh by applying a new coat of paint. Don’t forget the colors around the property, either. A bright green lawn or even crisp white snow contrasted with the few pine trees create visual appeal as well. If you’re interested in real estate investing, learn which colors to select, or hire a professional to select the right colors for you.
3) Repair. It should go without saying that you should ensure that everything outside is in good working order and looks attractive. This means that any broken walkways, bare patches on the lawn, and rickety shutters should be fixed up at once. You’ll find more success in real estate investing if you are selling a property that people want to buy.
Aug
12Costa Rica: An Exciting Real Estate Investment Prospect
Posted By: Ramon Rivas on August 12, 2010 at 9:17 pmTo this end they are actively encouraging international real estate investors and those looking for a retirement or second home overseas to come to Costa Rica and explore its exciting and affordable property market.
The Costa Rican real estate market is one of the most exciting in Central and South America right now as a direct result of the Costa Rican government’s commitment to promoting the property sector. With the implementation of a series of tax breaks and investment incentives available to overseas real estate buyers the success of the Costa Rican property market is practically guaranteed.
For those looking purely for real estate investment opportunity, Costa Rica offers two main angles for property investors to explore: -
Firstly as the natural beauty of Costa Rica proves an irresistible draw for more and more travelers and those in search of the perfect getaway, so the demand for rental and hotel accommodation in Costa Rica is on the increase. The supply of quality accommodation in Costa Rica cannot meet current demand and this situation is likely to deteriorate as the popularity of the country increases. The government is well aware of this fact and is keen to attract those wishing to develop specifically for the tourism market.
Secondly Costa Rica is becoming increasingly popular with the soon to retire US baby boomers who are actively seeking an affordable and attractive location in which to retire. Because Costa Rica enjoys relatively low crime, is neutral, has a relatively high standard and low cost of living it is gaining a reputation among pre-retirees as a must-consider destination. There is therefore room for the development of real estate to suit this particular market or for the purchase and long term lease of real estate to this market. This particular group of people also represents a strong resale demand for those who buy now, improve property and intend to resell in the medium term to release gains accrued.
The real estate investment climate in Costa Rica is hot right now with the government working flat out to attract sustainable foreign direct investment – those interested in making a move should consider committing to the market sooner rather than later while it remains a buyer’s market and before opportunities for the strongest investment gains are eroded by increased levels of investor awareness and interest.
