How Savvy Real Estate Investors Buy Bank Owned Homes At Incredible Discounts
We are all aware of the relentless tidal wave of bank foreclosures that have hit the American real estate market over the last several years. This seismic shift in market conditions has made acquiring new investment property more profitable than ever. As a result of so many foreclosures, banks have been forced to buy back these properties at the foreclosure auction.
But what do experienced real estate investors look for when they are actively pursuing bank owned homes?
1. Knowing The Most Important Number In Real Estate Investing
There are several key factors for the experienced real estate investor to consider when purchasing bank owned properties.Experienced real estate investors know that the “top number” is the most important factor when evaluating new investment opportuntities.
The number is also called the property’s “after repair condition”.This is the selling price after you have completed the renovation.
Property investors must know what similiar properties are selling for BEFORE they can put together an offer that makes good investment sense. For example, if 3 bedroom 2 bath houses measuring 2,000 square feet are selling for 0/square foot, experienced real estate investors will build offers around .00/square foot. In today’s market, you can certainly make your first offer at or around $.50/$1.00 (that’s fifty cents on the dollar).
With an oversupply of houses on the market, real estate investors are now in the driver’s seat.Develop a search criteria and go after these investment properties in a methodical, workman like approach.
Make good solid offers at very steep discounts and don’t hesistate to walk away from the negotiation.Don’t ever forget that we’re in a buyers’ market. The bank wants to sell the property much more than you want to buy it.Don’t hesistate to walk when the bank will not deal with you.
2. Inspect Several Bank Owned Homes
Usually, bank owned homes are listed with a realtor. So gaining access to these available properties is very easy.Savvy real estate investors know how to maximize their efforts by scheduling multiple property showings for a given time slot.
For example, instead of just scheduling a property showing for one bank owned home, plan on inspecting four or five of these investment properties.Since these properties are owned by the bank, they’re all vacant and easily accessible to all.
Just keep in mind that the property investor will be buying the bank owned home in “as is” condition.This means the bank will not be making any repairs to the property. So make sure you can handle the renovation project. You need to need to know the numbers here too.
Experienced property investors know how much both materials and labor will cost on every renovation project.Make sure you know the numbers here too.
It’s a good idea to overestimate your expenses by 10%.When you have the extra cash on hand for your renovation project, unexpected repairs are not that painful.When an investor can write a check, he doesn’t really have a problem. Just make sure you have adequate cash reserves on hand.
3. Pay Close Attention To The Bank’s Paperwork
Because so many banks are large corporations, you will be dealing with a large amount of paperwork when buying these investment properties.Carefully read and review every form and document that you are signing.You will need to fill out and complete the purchase agreement, property disclosures and any other bank required real estate documents.
Fill them out correctly.Check with the real estate agent and make sure that all required paperwork is properly completed. If you don’t fill out the paperwork properly the first time,
This will delay the bank’s response.In many cases, this one mistake may end up wasting many weeks of your time.Pay close attention to the details here.
There are many different ways to acquire investment properties for the experienced real estate investor.
Always make sure you have multiple methods that allow you to buy investment property at very good prices.Experienced real estate investors know that you need multiple lead generators in place.
With an over supply of bank owned homes on the market, this buying opportunity will be with us for many years to come.
I hope these new ideas opened your eyes to some new possibilities in your real estate business. There are many effective real estate investing techniques, this is just one of them.
Seven Signs That Pre-Foreclosure Investors Look For Every Time
Hi there real estate investors and entrepreneurs.
I wanted to provide you with a checklist of “buy signals” that experienced pre-foreclosure investors. look for and find when evaluating an investment property. These are sure signs that you’re on your way to buying your next investment property at a substantial discount.
You don’t need to have all seven in place, but when you find one, the others are usually close by.
Buy Signal #1: Homeowner Is Behind On The Mortgage Payment
This is an obvious one, but I thought it needed to be included in the list. Most homeowners who fall into pre-foreclosure cannot climb back out and usually end up losing the property.
When you don’t have money to pay the mortgage, you don’t have money to maintain the house or the grounds either.
Buy Signal #2: Grass Is Overgrown
After many years of running the streets as a pre-foreclosure investor, I learned to pick out (in an instant) the house in foreclosure as soon as I turned onto the street.
High, overgrown grass is a sure sign that the house is in trouble and the owners (if you can find them) will have a compelling reason to sell.
Buy Signal #3: Windows Are Busted Out
Busted out windows are usually found in vacant or abandoned properties.
When a homeowner in this situation moves out, the neighborhood kids like to get together and work on their target practice. This usually involves picking out the right target.
Buy Signal #4: Rotten And Exposed Wood
A house that has extensive rotten wood on the exterior has probably been neglected for many years. You would be amazed at what people will tolerate when it comes to sub-standard living conditions.
I once met with a seller who had a huge hole in the kitchen ceiling. The hole was gigantic – you could see straight up to the sky. I met with this homeowner for several hours discussing his options.
Not once did he mention the huge hole in the roof – not once. This was a very strange exchange.
Buy Signal #5: No Garden Hose
I have found this one item in the list to be more telling than any of the others.
For some strange reason, I could tell if a house is vacant or not, by looking for the green garden hose.
If the hose was still connected, the house was usually occupied. If the garden hose was gone, 9 times out of 10, that house was vacant.
Buy Signal #6: No Furniture
Usually when you suspect that a house is vacant, you peer into the nearest window to confirm your gut instinct.
When you see that the furniture is missing, you’ll know the seller has moved on to another place.
Buy Signal #7: Neighbors Haven’t Seen Them
Usually there will be a neighbor or two that can tell you something about the seller.
If the homeowner could not fix the problem with the mortgage, the neighbors usually knew all about it. They are sometimes a very good source of information