In this video we explore some tips for making a wise real estate purchase.
- Save For A Big Down Payment
- Don’t Overextend Yourself
- Consider the Work Involved
- Really Shop Around
In this video we explore some tips for making a wise real estate purchase.
If you’re getting ready to purchase your first home, you may
want to consider the advantages of leveraging your money through the use of a
multifamily property. This can be
especially appealing to young families just getting started out or busy
couples/singles on the go. So let’s
review some of the top benefits of multifamily investing:
First, by purchasing a 3 or 4+ unit within a desirable area,
you will immediately start reaping the benefits of home ownership and
collecting strong investment income. By
finding reliable tenants, you will be able to cover up to a half or more of
your mortgage payments.
And you will be consistently paying down principle and
building up great equity. When the time
comes to upgrade to a different property, the consistent income from you
multi-unit home will help to cover a portion of your new mortgage, plus you
will already be on the path to building your investment portfolio.
Additionally, instead of driving across town to keep up with
maintenance and tenant issues, you will essentially be your own on property
manager. This makes it infinitely easier
when trying to collect rent or conduct showings, and you don’t need to pay
another party to keep up with your home.
Next, in today’s market, cash flow is of the utmost
importance. Nothing is worse for a new
investor then when the property goes vacant for months. With a multifamily unit, you can alleviate
the fear of being stuck with the full amount of mortgage payments, because
typically your home should be at least 50% occupied.
Finally, you will be learning the ins and outs to one of the
most effective investment strategies available.
Purchasing your first multi unit will teach you all about how to buy,
repair homes, market your property to tenants, collect rent, and how to invest
your income into future properties.
Therefore, it is worth considering a multifamily home for
your first purchase. Before choosing an area
to live in and searching for a property that fits your needs, it will be to
your advantage to consult an experienced Realtor within you local area that can
give you professional guidance.
Contact us today @ 813-863-5917 to start learning more about
the opportunities available to you and to discover where you can make a wise
investment for your financial future!
A very common question I get is “How soon after my foreclosure can I buy another home?” There are a couple of answers to this question and they depend on how soon and how badly you need a home.
The first option to getting a new home is to simply pick one and buy it with conventional financing. The lender who will be looking at your credit will be very reluctant to finance another home for you. However, with a large enough down payment (20% minimum) and your willingness to pay a higher interest rate, you could have a new home in 45 days. [Read more...]
There are thousands of foreclosed single family homes available in the market today. These homes range from large sprawling estates to small-unit condos to townhouses. A common denominator among these homes is that they are all spacious enough to have two or more bedrooms, a living room, a dining and kitchen and a bath.
The more popular structure of foreclosed single family homes are detached and surrounded by outer spaces for a garage or a lawn. The prices of these homes vary depending on location, size, condition, as well as on the length of time they have been on the market. Some of these homes
only get sold after several price adjustments by the seller.
Foreclosed Single Family Homes
It is typical to find foreclosed single family homes at only a fraction of its actual price. With the right tools like a reliable online listings service, potential buyers can search for these homes by state or by price. These homes will likewise be listed on real estate companies, newspapers and the county courthouse. The listing will always have the contact details for the property manager that buyers can contact to inquire about the home.
These homes can be purchased at various stages of the foreclosure process. Many buyers purchase them during pre-foreclosure through a short sale. This happens when the home owner elects to the sell the home rather than get foreclosed on. With thelender’s approval the property is sold for a price that is lower than the outstanding debt owed by the homeowner.
Buyers with ready cash on hand purchase these homes through public auctions. Auctions are popular among buyers as it takes only a short time to transfer the deed of the property to the buyer. Yet another means of buying foreclosed single family homes is through real estate agents appointed by banks or the government to sell their foreclosures.
Buying repo homes for sales have become a common exercise for a lot of investors. Even first time home buyers have completed purchases of these properties to their satisfaction. While there may be some risks involved, these are overtaken by the benefits to be reaped and this is the reason why more and more people are getting on the bandwagon and finding their own home to buy.
Most of the risks involved in buying repo homes for sales are brought about by acting on poor data. Getting the wrong information can set you back financially. It is a good thing that there is adequate knowledge about the foreclosures sector to enlighten new buyers. One should try to learn the workings of foreclosure investing first before they even look for a property to purchase.
Foreclosure is a legal action taken by lenders to recover losses due to non-payment of the loan they provided for a borrower used for purchasing a property. Once the foreclosure proceeding is initiated the home is scheduled for a public auction where it is offered at a value that represents the unpaid portion of the loan. If the home does not sell at an auction it becomes the property of the lender where it will again be offered to the market in roughly the same amount.
Repo homes for sales also get sold at the pre-foreclosure period. Also called short sales, these types of transactions take place when the owner themselves seeks the approval of their lender to sell the home for a price that is lower than what they still owe. Lenders usually go for this type of sale because it relieves them of the costly foreclosure proceeding. It is likewise favorable to the home owner who gets to keep their credit rating which can be decimated by a recorded foreclosure.
Buying foreclosed homes has become popular amongst real estate investors and individual buyers. While these types of properties are normally priced below market value they generally require some level of repair. Those who do not carefully inspect foreclosure real estate could end up investing in a money pit.
Foreclosed homes can be purchased through public foreclosure auctions or banks. When properties are repossessed, banks first list them for sale through auction. Auction attendees submit bids and often compete against several buyers.
Individuals purchasing foreclosure real estate through auctions should have a thorough understanding of how the auction process works, as well as the foreclosure laws of the state where property is located.
Some states allow foreclosed property owners to buy their house back within 30 days after being sold through auction. This can be quite disruptive when buyers have invested money for repairs or paid off creditor judgments to clear the title. This can also slow down repair progress as buyers do not want to invest in renovation work if there is a possibility the evicted homeowner will reclaim their home.
When houses go unsold through foreclosure auction they are returned to the servicing lender. At this point they become bank owned foreclosures. Other common references include real estate owned or REO homes.
Banks negotiate with lien holders to clear creditor judgments or tax liens in order to sell the property with a clean title. Banks also engage in eviction action to remove property owners refusing to vacate the premises.
These activities cost the bank money, so REO properties are normally priced higher than foreclosures sold through auction. However, buyers can purchase the property without the burden of removing liens, judgments, evicting property owners, or worrying that the homeowner will reclaim their house.
Just as when buying any real estate; buyers should engage in due diligence. At minimum, buyers should review comparable sales reports to compare purchase prices of other homes in the area; obtain real estate appraisals to determine current market value; and home inspections to determine the types of required repairs.
Banks reduce foreclosed home prices to account for the cost of reported repairs. Banks rarely reduce the asking price of REO homes unless substantial damage is discovered during property inspections. Buyers should obtain repair costs estimates to determine the true cost of the home. If the purchase price and repair costs equate to more than the appraised value, it’s best to pass and look for a better deal.
Most banks require buyers to obtain prequalified financing prior to submitting offers on foreclosed homes. When buyers purchase foreclosure real estate through public auctions they normally must present full payment to the auction house within 24 hours upon bid acceptance.
Individuals unfamiliar with buying foreclosed homes through public auctions or banks may find working with a foreclosure specialist to be helpful. Realtors can help buyers locate the type of property they desire and assist them through the process of buying foreclosed real estate.
Buyers may also want to consult with real estate investors experienced in buying distressed properties. Numerous real estate clubs can be found via the Internet. Buyers can participate in online investment groups or locate local real estate investment groups within their hometown.
Those who take time to become educated about the process of buying foreclosure real estate can minimize financial risks, locate the best financing deals, and obtain the best price for the property.
Read more: http://www.articlesbase.com/real-estate-articles/foreclosed-homes-things-to-know-before-you-buy-3665853.html#ixzz15VxawlhQ
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A problem that is frequently happening to homeowners is their home has more mortgage than market value. With the severe decline in real estate markets across the country, the hardest hit areas have hundreds of thousands of “upside down” mortgages. Simply, this is where the amount owed on the property is more than the value at which the property can be sold, even if the homeowner is willing to make the payments and wait for possibly years. The adage is familiar to everyone “why throw good money after bad” with the result that homeowners across America are simply walking away from their mortgages and letting the lender take their homes back by foreclosure.
This market pressure of homes coming on the market further compounds the problem with falling home values and fewer homes being sold at any price except well below what was considered fair market value (FMV) just months before. The decline has stopped in many parts of the country and will stabilize in the coming months. Until then, the homeowner in a distressed market with an upside down mortgage is forced to make a decision about his future and whether it makes economic sense to make the mortgage payments or not.
One option to the homeowner who wants to leave his home is to offer the lender the deed to his home and simply walk out the front door never to return. So if the lender had a chance to get the deed why wouldn’t they take it so the foreclosure process with all its costs would be avoided? One reason not so obvious to the homeowner is the accounting practices of the lenders. It is more beneficial to have a foreclosure in progress than to have a bank owned property, called “real estate owned” (REO) property. While the difference is relatively small to the lender’s accounting system, when multiplied by thousands of foreclosures, the REO’s can be a financial catastrophe. More often, the lender has gotten a Broker’s Price Opinion (BPO) or appraisal as soon as the homeowner is 90 days late on his mortgage. The lender knows exactly how much trouble they are in when they take the home back by a deed in lieu of foreclosure or by a foreclosure action that turns the property into an REO.
If the property is encumbered by a second mortgage and other liens such as mechanic liens or any junior mortgages or judgments, the only way the lender can safely take the property back is to “extinguish” these junior liens and get free and clear title after the foreclosure action. So if the homeowner calls the lender and requests to give a deed to the lender, the lender will do his research first to see whether the foreclosure process is necessary.
A homeowner in foreclosure who has no junior liens, mortgages or judgments against his property should call the lender directly and request the procedure for the lender taking the deed from him. Caution – if the lender says the homeowner must fill out a financial statement and give a “hardship letter”, the homeowner must remember that the lender can use the financial information to get a judgment against the homeowner later if the residence is not the homeowner’s homesteaded property or if the homeowner has other assets that can be attached by a judgment. Get legal advice from an attorney who is competent in dealing with real estate transactions about what information is actually needed by the lender to take the deed, and remember if there are junior liens, the lender will never take back a deed in lieu of foreclosure no matter what they tell the homeowner.
Read more: http://www.articlesbase.com/real-estate-articles/why-wont-a-lender-take-your-deed-in-lieu-of-foreclosure-548027.html#ixzz15QUH4vBW
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How does a foreclosure affect your credit report is an interesting question. Yet this is the most frequently asked question we get. The method of calculating a credit score (FICO Score) is proprietary information. What complicates the issue even further is that all credit information is calculated into the individual’s credit score as it is entered by creditors and is only updated whenever there is an inquiry.
The second most asked question is “How soon does the foreclosure go on my credit report?”. This depends on the lender but in the vast majority of cases, as soon as the homeowner is 90 days late (30 days in some states), the foreclosure info is filed with the credit reporting agencies. It will not be “reversed” by a short sale or a deed in lieu of foreclosure unless negotiated by the homeowner, and often that doesn’t work.
So with the foreclosure question, the homeowner’s credit score is first decreased by his late payments. Usually, he is also late on other bills because of his financial crisis and has additional late payments, collections, or even judgments that all lower his credit score. So if he had his credit score of 680 on a specific date before he started his personal financial decline, after he has been served with his foreclosure notice or even after the foreclosure is completed; his new score could be 420 or lower. He is usually shocked and dismayed, but the real problem is how much more interest the lenders want because of his low credit score. For example, an auto loan to an “A+’ credit customer could be 0% interest while for a “D” credit customer, it could be 11% or higher. What does that actually mean? It means that the “D” credit individual will pay $7,500 to $13,000 more for the same car as the “A” credit buyer! The collateral for the loan is the same car, so the “D” credit person is unfairly penalized for his credit situation.
The foreclosure’s actual point impact on an individual’s credit report is estimated to be from 125 to 175 points. The bigger impact is from the late payments on other bills which quickly mount up. The net effect is generally considered to be about a 240 point decline counting his late mortgage payments. Ironically, the lower your credit report to start, the less the impact of additional late payments, and if you get into the 400′s, it’s really hard to get much lower without almost trying to hurt yourself. Many of the items on any credit report can be removed over time. It requires persistence and it’s estimated that 30% of all items on credit reports are incorrect and can be removed just by an inquiry or showing a paid invoice. Also the credit score reduction for the foreclosure is reduced as time goes on, until it settles at a minimal deduction (50 to 75 points) after a few years.
It is absolutely untrue that once you have had a foreclosure you can never buy a home again, as we see people buying a new home within a year of losing theirs to foreclosure. There are even homeowners who legally buy homes within 30 days of their foreclosure using legal techniques with no cash and no credit.
Foreclosure victims, who want to do conventional financing in the future, will have to pay a higher interest rate (approximately 1 and a half to 2%) unless their down payment could be 10% to 20% of the purchase price. This sizable down payment can often be obtained from friends or family members and carried as a second mortgage or second deed of trust on the property.
I am often asked if doing a “Deed in Lieu of Foreclosure” or a “Short Sale” with the lender reports the same as a foreclosure. Unfortunately, depending on how the lender reports your foreclosure, it could stay on your report even if the lender accepts your deed to resolve the foreclosure. The foreclosure action does not have to be filed in the courts to be considered a “foreclosure” by the lender. If your lender accepts a “Deed in Lieu Of Foreclosure” or a “Short Sale, always them ask for a letter explaining they have accepted your deed in exchange for your home, and that they will retract or not put a foreclosure notification in your credit record. If they tell you they have to, it’s not true, ask for a Supervisor until you get your letter.
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