Foreclosure Real Estate
0 4 min 4 weeks

Learn About Foreclosure Real Estate Investing Before You Get Started

Foreclosure Real Estate
If you’re looking to get involved in the foreclosure real estate market, it’s important to learn as much as you can first. But, let’s face it… buying foreclosed houses can be a business as well as a nightmare. If you think you are going to be safely buying foreclosed houses and making a profit, you should avoid investing in properties where the mortgage will exceed the market value of the home. Here are some things to look out for when it comes to investing in foreclosures.

Title –

One of the biggest mistakes you can make is buying a foreclosure property without knowing whether there is a current title or not. If there is a title and you purchase the property, you are responsible for clearing it. If you purchase the property with no title, you will be responsible for clearing any liens or judgments before you can take possession of the property. title- VeniceResearchers have reported that 25% of foreclosures are without titles, indicating that more than 13% of properties that were foreclosed in the country could have been questionable titles.

If you purchase a home with a title that is questionable, the process of making title insurance in this particular state can take three to four months. This means that during that time, you cannot sell the house and make money, and you cannot even refinance the property until you have researched all of the liens against the property and have a title that proves you have the right to sell it.

And listen to this: According to the findings of the pinned-up property blog, over 62% of all foreclosure buyers do not even know the value of their property. Of those who do, health insurance.gov has provided an estimate that the average 30 year-old house is worth just over $100,000. This means that if you plan to take out a traditional 30 year loan, you will probably end up paying around $20,000 for a house that is around $100,000.

Location –

If you are purchasing a foreclosure in a neighborhood that is rundown, you will want to look at the long term vision that homeowners and renters are willing to continue their residency there. If there is a considerable amount of commercial and residential property located in that neighborhood, just be aware that once the real estate market rebounds, property values will increase due to rehabilitation.

Proximity to Public Transportation –

Rental rates are very affected by the proximity to public transportation. discretionary income for renters can be affected by the availability of public transportation. So commercial property located near a major station could be a loss to the property’s value.

Noise –

We have all heard about the “Real Estate silence autopsy” referring to the report of tenants saying they were Dolphin unwitting refugees from South Beach in Florida. Property owners need to inform tenants that they have a responsibility to abide by the lease and that pretty soon, they will become “the last people to find out.” Being the first one to find out about a real estate deal could ruin your deal.

These are just a few tips about how to avoid investing in a “Real Estate nightmare.” Avoiding the potential pitfalls will give you peace of mind knowing you made a sound investment.