Buying Real Estate for Profit

Foreclosures - Opportunity or Impossibility?

It seems like everyone is racing towards foreclosed properties these days. I hear people talking about the great opportunities out there to pick up single family homes at at 30-40% discount. If you look closer it is apparent that what everyone is racing towards may be more trouble than it will be worth.

Properties end up in the foreclosure process for a variety of reasons. The most common causes are loss of a job or serious illness on the part of one of the borrowers. People seldom go into foreclosure voluntarily.

There are two ways to purchase a home that is in the process of being foreclosed upon. One way is to contact the owners of the home and negotiate with them directly. The laws vary from state to state, so make sure you are aware of the rules before you get into the game. The sellers may even have the right of redemption and could end up getting the home back again even after you have purchased it.

The other way to buy a foreclosure is to purchase it at the trustee's sale. The county in which the property is located handles this transaction. Many times you will not be able to see the interior of the property before you buy it and you could easily underestimate the cost to repair the home so that it could be resold or lived in.

Foreclosures in Los Angeles Up 800%

According to the local newspaper, foreclosures in Los Angeles County are up 800% from this time last year. What the article neglects to explain is that there is always more to the story than just the statistics and other numbers.

Being in the real estate business for more than 27 years now has given me the opportunity to see many things that have never made sense to me. One of these is the idea that people will walk away from a home and let the bank foreclose on it if that home depreciates in value. We all know that real estate will appreciate over time but there is no guarantee that this will happen with any regularity or predictablilty. When you borrow money from a lender in order to purchase a home, you agree to pay the money back. Period. There is no clause that says you don't have to repay the loan if the home decreases in value.

What does that mean to investors? Simply this. Take a closer look at REO's and foreclosures in areas you wish to invest in. You can pick up some sweet deals right now and in the coming months by purchasing homes that have gone down in value. If there are in desirable neighborhoods they will increase in value at some point in the future. You may have to wait a year or even two years, but the values will again climb ans you will realize a nice profit.

Foreclosures Up In Santa Clarita and across the U.S.

Foreclosures are up across the United States and even here in Santa Clarita. Buyers looking for a deal may wish to pursue these foreclosed properties, but it is important to know what you are doing. If you are buying from a lender you will not receive a disclosure form stating what may need to be repaired in the property. Lenders are exempt from these disclosures because they have not lived in the property. Protect yourself by using a realtor and certified appraiser when making your offer and purchase.

This can be a good time to buy residential property because prices may go even lower. There is not as much competition right now among homebuyers, and sellers will give you more concessions to entice you to choose their property over another in this market.