Entering the Real Estate Business through Foreclosed Homes for Sale
Buying foreclosed homes for sale and reselling them on the market is a good business plan. While there are thousands of foreclosed homes for sale and most of them are HUD homes or bank repossessed properties, anyone planning to get great deals on them should at least get some knowledge about where these properties are located. The first thing to remember is that not all properties can be purchased for half their market price, as some real estate companies would have you believe. But with that said, investing in foreclosed homes for sale is still the fastest route to starting a real estate business or growing an existing portfolio.
Where exactly are these properties?
Fortunately, finding foreclosed homes for sale is fairly simple, actually buying them is a different story, but rest assured that neither the government nor the banks want to hold on to these properties. Bank owned homes are probably the easiest to find, they are also known as Real Estate Ownership or REO. These homes are not part of the bank’s assets, maintaining them is a daily drain on its capital. That is why banks are particularly interested in selling them. The prices at which these homes are being sold are a reflection of their individual condition and market conditions. Banks will offer them with low-cost starter mortgages, but they may omit the information that these mortgages will increase over time, so don’t fall into this trap. Information on these properties is available through the banks themselves and will be listed with local brokers and real estate agents.
The main source of government foreclosed homes for sale are the government bank housing finance companies, Freddie Mac and Fannie Mae. The thing about HUD homes is that the government gives you priority if you’re an owner-occupant, meaning you’re buying the home to make it your residence. Only when there are no offers of this type are the houses offered to other types of buyers, such as real estate investors. If you’re looking for variety, you can find it at other US federal offices. The US Department of Agriculture is selling farmhouses. The Internal Revenue Service sells houses that were seized to cover a person’s unpaid internal income taxes. The US Marshals Service disposes of homes held by the Department of Justice’s Asset Forfeiture Program.
Foreclosure homes for sale are indeed viable options for people looking to get into the real estate business or those looking to expand their inventory. In any business, it’s always good to know where to get your product to ensure you’ll have a steady flow when sales start to pick up.