Properties that have been foreclosed are often a gold mine for any experienced or novice investor in real estate. Typically, properties that have been foreclosed are sold by the bank or financial institution for a price well under the current market value. This means that anyone that can purchase and repair the property can earn huge profits when they resell it.
Most individuals avoid looking at foreclosure properties because they believe they need impeccable credit and huge amounts of investment capital. However, there are effective ways that any investor in real estate can purchase foreclosed properties with virtually no credit and no money down.
Finding the Properties
Properties that are distressed in the community are those that are about to go through foreclosure sale. Any notice of a foreclosure sale will be posted on a board in the County Clerk’s office, in the county with a distressed property is located. This is because it is a public record that a foreclosure sale is about to take place. If you’re unversed in this procedure, be sure to contact us. We have a lot of experience with buyers and foreclosures.
Typically, the best time to locate the new list of foreclosure sales is the first Tuesday of the month. This is the time when the last huge batch of properties that were foreclosed had been sold at auction, typically on the steps of the County Courthouse, or at the Sheriff’s office. It is then that a new list of any upcoming foreclosure sales will be clearly posted.
Contacting the Financial Lender
On the list of foreclosures will be another list of lenders that are owed monies on the property, and have called for the property to be foreclosed. We’ll make contact with the financial lender and offer a proposal to assume the loan on the property without the need to qualify. The loan assumption without the need to qualify simply means that you will be willing to take over any current and future mortgage payments for the lending institution.
However, your proposal to assume the debt requires that the bank not qualify you based on any credit check. Typically, small lending institutions will agree to this format if you have the ability to prove that you have a minimum of three months reserve payments. However, tighter lending laws may prevent those wishing to purchase to qualify in this manner. Be sure to check with us about the latest lending procedures when it comes to foreclosures in the Prescott area. Cash buyers usually win out over loans, and most banks will not even look at an offer for at least 5 days after being on the market. The trick is to catch it before it hits the market. We have a short-list of folks who are interested in finding out about these deals. If you want to get on the list, contact us.
Contact the Property Owners, No
Contacting the property owners in a foreclosure situation is practically unfruitful. In large cities where moguls with huge wads of cash are able to walk neighborhoods and influence distressed homeowners by waiving a belt of bills in their face is very rare in smaller communities. The truth is, the homeowner may be paralyzed by the situation emotionally and afraid to even speak with the bank. This is where we come in. We can talk directly to the bank on the seller’s behalf to see if a loan assumption is even possible. If the bank agrees, it can allow the seller to avoid the foreclosure and help them evade any damage to their credit history.
Once the entire process has been completed, you will receive the keys to your new home, and the lending institution will have transferred the title or deed of the property directly into your name.
© Matt White - REALTOR® |