Do you wonder which properties make the best investment? If so, you're not alone. The real estate market has undergone radical changes in recent years; leaving many investors holding investments they cannot sell.
A variety of properties exist that can allow investors to generate positive cash flow. Some of the more popular include foreclosure homes and short sale real estate. These property choices often make for great rental homes that can be used as Section 8 housing or sold through creative financing strategies.
Although the economy has not yet fully recovered many investors purchase distressed properties for use as vacation or corporate rentals. Several popular tourist destinations have been hit hard by foreclosure.
Numerous property owners who were buying second homes in coastal communities allowed their property to fall into foreclosure. These once expensive locations are now a hotbed of activity for buying houses well below market value.
Another home buying trend that is attracting the attention of real estate investors is Fannie Mae Homepath. This government-sponsored program offers a variety of residential properties across the nation. In addition to being priced below market value, investors can finance Fannie Mae homes through Home Path Mortgage.
Home Path Mortgage offers special financing options and a minimal 3-percent down payment requirement when buyers finance through chosen lenders. What's even more exciting about this program is many Fannie Mae properties qualify for Neighborhood Stabilization Program grants offered through HUD.
Investors can also purchase foreclosure homes through public auctions or through mortgage lenders. When banks repossess houses the properties are first listed for sale through foreclosure auction. If no one bids on the home it is given back to the mortgage lender.
Once banks regain ownership they list the property for sale through their loss mitigation department or designated real estate agent. What's nice about bank owned homes is they are sold with a clean title.
When houses are purchased through foreclosure auction there is a possibility that foreclosed property owners will buy the house back from the bidder. Not every state offers this option, but many do.
This can cost investors money because they either must wait out the redemption period before making repairs or renting the home to tenants. If they commence with repair work and property owners reclaim their house, investors are not compensated for time and materials. Investors do not need to worry about the redemption period when buying bank owned real estate because once the bank takes possession property owners relinquish rights to reclaim it.
Probate properties often make for excellent investments, but require investors to engage in considerable research. Probate is used to validate decedents' estates and distribute inheritance property. The probate process can last several months or even years if disputes over distribution arise.
When probate real estate is secured by a mortgage note, the estate must continue with loan installments until the estate settles. It is not uncommon for estates to be financially incapable of complying with loan terms. When this occurs, estate administrators are forced to liquidate the property.
To locate probate properties for sale, investors must research public records to review decedents' last will and testament and property records. Depending on the state where properties are located, investors may be required to submit bids through the court or directly to the estate executor.
These are just a few properties that can provide a good return on investment. We invite you to browse our comprehensive real estate investing article library to obtain additional details for each type of investment, along with creative financing strategies to sell properties at top dollar.
Published on January 06, 2011 at 02:37 AM