In this current real estate crisis, many people are loosing their homes either because they can't make the payments or are walking away because their house is worth less then the amount owed. It was reported by CNBC on July 24 that foreclosures now represent half of all the homes sold in the US. Although this is downright scary to a highly leveraged homeowner or speculator this is also an opportunity of a lifetime for anyone looking to buy real estate at these depressed prices.
Donald Trump is a great example of someone who was investing in real estate during a downturn in the market. Now look at him! "There are always opportunities", he is quoted as saying. "When I first started out in Manhattan, everyone was saying what a terrible market it was". He admits if he had listened to the nay Sayers he won't be were he is today.
Many of the top real estate investors, including Mr. Trump, now feel that this is currently a good time to invest in real estate by purchasing pre-foreclosed or foreclosed properties.
The main reason to consider buying a pre-foreclosed property rather then waiting until in becomes a foreclosure property is because that way you can buy it from the current owner. This will give you more time to inspect the home as well as developing a mortgage with the bank.
There are macro (local community, etc.) and micro aspects to take into consideration when looking for a pre-foreclosed home. Here are the some of the macro aspects:
- Look around the neighborhood to see how many homes are being foreclosed. It's best that the house you're considering for purchase is the only one facing foreclosure. Obviously the more homes in forced sale, the more likely the properties will depreciate.
- Ask around to find out whether the rent rates in the neighborhood are going up or down. Buying in a neighborhood where demand for rental units is on the increase is important.
- What is the employment rate in the area? If declining then that may indicate that it's not the right area in which to invest. Does the local economy appear to be stable?
- Check with the local government to see of any upcoming infrastructure projects that will be taking place within 2-3 years. Projects such as new shopping malls, highways, train/subways lines, building permits for new businesses being established, new parks near the property, etc.
- What are the demographics? If there is an extremely high level of seniors in town and only a small percentage living in nursing homes, guess what, it could cause a housing surplus within 10 years or so.
If you do your due diligence and find positive answers to these questions when considering a pre-foreclosure then you can feel secure that it is a good community in which to invest. Successful real estate investors buy discounted properties at the right location at the right time.
Donald Trump is a great example of someone who was investing in real estate during a downturn in the market. Now look at him! "There are always opportunities", he is quoted as saying. "When I first started out in Manhattan, everyone was saying what a terrible market it was". He admits if he had listened to the nay Sayers he won't be were he is today.
Many of the top real estate investors, including Mr. Trump, now feel that this is currently a good time to invest in real estate by purchasing pre-foreclosed or foreclosed properties.
The main reason to consider buying a pre-foreclosed property rather then waiting until in becomes a foreclosure property is because that way you can buy it from the current owner. This will give you more time to inspect the home as well as developing a mortgage with the bank.
There are macro (local community, etc.) and micro aspects to take into consideration when looking for a pre-foreclosed home. Here are the some of the macro aspects:
- Look around the neighborhood to see how many homes are being foreclosed. It's best that the house you're considering for purchase is the only one facing foreclosure. Obviously the more homes in forced sale, the more likely the properties will depreciate.
- Ask around to find out whether the rent rates in the neighborhood are going up or down. Buying in a neighborhood where demand for rental units is on the increase is important.
- What is the employment rate in the area? If declining then that may indicate that it's not the right area in which to invest. Does the local economy appear to be stable?
- Check with the local government to see of any upcoming infrastructure projects that will be taking place within 2-3 years. Projects such as new shopping malls, highways, train/subways lines, building permits for new businesses being established, new parks near the property, etc.
- What are the demographics? If there is an extremely high level of seniors in town and only a small percentage living in nursing homes, guess what, it could cause a housing surplus within 10 years or so.
If you do your due diligence and find positive answers to these questions when considering a pre-foreclosure then you can feel secure that it is a good community in which to invest. Successful real estate investors buy discounted properties at the right location at the right time.
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To locate the top pre-foreclosure sites the Internet has to offer check out government auctions review or go straight to pre-foreclosures
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