If you are considering entering the world of foreclosed property purchasing, there are a few
things to keep in mind as you envision being the next “Fix ’n’ Flip” mogul. While you are
probably aware that there may be mountains of repair and refurbish in your future, there are
some other issues that significantly slow down or completely stop the purchase altogether.
Borrowing Blues – lenders will not give you money if the property if they deem it uninhabitable
or if the appraisal comes in lower than the sales price. Best solution for this? Bring cash to the
Hurry Up And Wait – Although you would think lenders want to get rid of foreclosed properties
as quickly as possible, this is not always the case. In what feels like a peer-trip move, banks
often drag their feet when considering an offer and all the way through the process in general.
Put your patience cap on and be prepared to wait a while.
Property Secrets – No one from the bank has lived in the house, so the only way you will find
out if it has any “secrets” you need to know is through a home inspection and simply asking
around. You may find out things that you do not want to deal with after you have purchased the
home, and it is too late to get out of the transaction.
He Who Has Cash Is King – Foreclosures can be great deals , so cash purchasers are eager
to buy them up to flip or use as a rental property. Investors with cash can make offers with little
to know contingencies, and banks REALLY like that. Be ready to choose a different property as
the one you have your eyes on can easily get scooped up by a cash investor.
Purchasing foreclosed property can be a great investment or a great disaster. Be proactive in
your research so that the money you save is worth the effort you will need to put in.