Investor Buyers Make Money On Foreclosures
Are You Looking To Get Ahead In This World Of Financial Uncertainty?
Well lets start with the banks. They have what we need, homes that mortgagors have defaulted on. The majority of foreclosed homes coming on the market are Fannie Mae & Freddie Mac guaranteed properties. The volume of units that they are selling right now are driving down prices so low because they are instructing real estate brokers to get these homes sold in 90 days or less. That means that homes are being discounted deeper than just a couple of months ago when they are placed on the market MLS.
Here is a good example, a home near Higgins Lake that was just remodeled in 2004 on 2 .5 acres with over 1700 SF of living space, 4 bedrooms, 2 baths, heated garage, paved drive and storage barn listed for just $66,000. Just 2 years ago that property would have listed for $140,000.
Fact: A search for foreclosed properties in the Roscommon Higgins Lake area, 2 bedrooms $40K and under brought up 8 listings. Just think what is out there in all price ranges! The reason for the $40K is simple. The investor can leverage the most opportunity and profit potential in the $40K range and under. Some homes were selling for $12k to $22K!
Investors tend to rent these units out in the past. My current point of view is to sell these units a few months after sale on Land Contract. The reason is supply and demand. A search in the local paper found tons of vacant rentals but few homes for sale by Land Contract. The calls coming into my office inquire more for Land Contract instead of rentals. Generally sellers will not sell to people having just lost a home to foreclosure. Investor, you need to reconsider and recognize the fact that there are good buyers that need a home. They go to work and pay there bills but were forced out of there homes by the banks and the mortgage meltdown. These people need the security of ownership for the most part and would prefer owning over renting any day.
Here are the keys to your strategy:
When you sell on Land Contract you may……..
– get a deduction for depreciation
– sell for more than you paid because demand is up
– sell for a low down payment to get the buyer into the house
– finance at 6 to 7 percent interest
– buyer pays property taxes
– buyer pays for dwelling insurance
– buyer pays for maintenance
– owners that have equity in the property take better care than a renter
– if they default Land Contract foreclosures can be quicker than bank foreclosures
– if they default you keep the down payment and can resell
– more time and money for yourself because you don’t have to manage or hire a property manager
Fact: Why leave your cash in the bank where your money is undervalued and not appreciated. The very banks and politicians that got the country into this financial mess insult you with paying almost nothing to have your money in there institutions!
If you decide to purchase property to resell on Land Contract seek out advice from a real estate attorney. There are many different ways to word a Land Contract. Also verify if the seller will allow you the buyer to resell immediately or if there is a waiting period. Some Government Service Enterprises have a waiting period.
Now make the decision and contact me online or by phone at 989.240.0970 to get your personal strategy underway to a prosperous future.
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