In my last post, I talked about pre-foreclosures. Today, we need to cover post-foreclosure and all it entails. Remember using good real estate comps helps make a profit on every deal.
Trustee sales are beneficial to business because you gain negotiation status. Foreclosure notices are placed in the newspaper, allowing you plenty of time to research properties before you decide to bid on a house. Once you find a property you want to bid on, you can go the auction and place your bid.
The key to the foreclosure sale is to do your research and understand your target market. It’s an opportunity to purchase some solid properties in good neighborhoods.
The final stage of foreclosure is post-foreclosure property. This is when the bank now owns property or real estate owned REO. The bank owns the home again, but isn’t making any money on it. In other words, it’s a liability.
One advantage to purchasing REO is that banks are highly motivated to get the property off their books. They are likely more willing to negotiate at this stage as the property is costing them money.
At this point the lender has spent a good deal of money going through foreclosure and they may actually try to recover fees and monies lost during foreclosure by tacking them onto the sales price. At this stage, the home is selling for the highest price in the entire process. If you’ve played your cards right, you have bought the property prior to this stage.
I look forward to you joining me next time and we will continue to expand our real estate knowledge. Remember InvestorComps is here to help with any of your real estate comps valuation needs.