Today, many properties exist which allow real estate investors to obtain substantial profit. Even in a shaky market, real estate has a proven track record for weathering financial storms. Investors who purchase distressed properties today can potentially make a fortune tomorrow. The secret is in knowing how to locate the most profitable properties.
Foreclosure properties have been at the forefront of the news. Considering millions of homes have fallen into foreclosure, there are an abundance of vacant homes available through foreclosure auctions.
While there are deals to be found through auctions, most foreclosed homes are sold for the amount due on the mortgage note. A large percentage of these properties have little, if any, equity. Few are in perfect condition and will require some level of repair. When bidding on homes at foreclosure auctions it is imperative to do your homework on the property. Otherwise, the house could end up costing more than it is worth.
If no one bids on foreclosure properties at auction, they are returned to the bank. At this stage, properties become real estate owned (REO) and are managed by the bank. REO properties are generally sold at or below market value. However, with the recent influx of foreclosures, many banks are beginning to sell bank foreclosures at 10- to 20-percent under market value.
Bank owned properties are sold through the lending institution that holds the title. Many banks sell REO properties through their loss mitigation department. Oftentimes, these properties are published on the lender's website.
Banks rarely accept less than the asking price because they are in business to make money. When placing an offer on bank foreclosures, be prepared to make multiple counter-offers. If the bank refuses to budge, be prepared to walk away. Remember, there are plenty of properties on the market and there is no need to waste time haggling unless it is a prime piece of real estate you simply cannot live without.
A more effective way to locate low-cost real estate is to seek out private real estate investors who purchase bank portfolios. These savvy investors buy real estate in bulk in order to obtain properties at wholesale pricing.
It is not uncommon for investors to purchase distressed properties at 30- to 40-percent under market value. They then pass a percentage of their savings along to buyers; providing them with instant equity.
Last, but not least, great deals can be found on properties held in probate. Probate is the process used to establish validity of decedent's estate. The probate process can take months or years to settle and ties up assets and inheritance rightfully due to heirs and beneficiaries.
When real estate is held in probate, the estate administrator must continue making mortgage payments and maintaining the property. In many cases, this creates a financial burden for the estate.
Probate properties can be located by paying a visit to the local courthouse. Assets held in probate are public record and can be accessed by anyone. By seeking out probate records with real estate holdings, investors can locate potential properties which can be purchased significantly under market value.
Our real estate article library contains dozens of information articles on how to locate probate properties, along with an abundance of information on real estate investment strategies. New articles are added frequently, so we invite you to bookmark SimonVolkov.com and stop by often.