Buying a Foreclosed House
As you consider purchasing your new home or rental property, you will appreciate the high price tag attached to housing. Any rational purchaser will be looking into how to save a few thousand dollars. A smart option for investors and homeowners are foreclosed houses and properties. However, this option doesn’t come with its range of risks. Before deciding on such an investment, potential investors and homeowners should have the full information in hand.
Sapphire Capital Investment LLC is here to advise you on the subject matter.
The premise of a foreclosure is a mortgage. A property owner may have used a loan to purchase the property or used the property as security. If the borrower fails to make the repayments as agreed, the lender has the right to seize the property and resell to recoup the money borrowed.
The details and procedure of the foreclosure process differs from State to State. We recommend that you familiarize yourself with State foreclosure laws.
The Pros of Purchasing a Foreclosed House
A lower price tag
This is often the most sought-after allure of a foreclosed house. Due to the circumstances behind its selling, the seller (in this case, the financial institution) will be looking to quickly get a buyer for the property. The property will be offered at a price significantly lower than the market value.
Ask any experienced property owner or investor on the time taken to close a real estate purchase. It can take any time between one to three months. With foreclosed process, you can expect a faster closing time. You can expect to have the title to your property between 4 to 6 weeks’ time
One cannot ignore the opportunity that foreclosed properties present to investors. Consider the following scenario. After purchasing the property at below market value, you can significantly increase the property value by adding in the right fixtures and making the necessary renovations. Using the fix and flip strategy, an investor is almost assured of a solid return on their initial capital outlay.
The Cons of Purchasing a Foreclosed House
No prior inspection
In a typical home/ property purchase, you will be looking to thoroughly inspect every inch of the property. This is not the case for foreclosed properties. You might not be able to examine the property or have it inspected by a home inspector. Since you know the address, the much you can do is perform a drive-by.
The need for repairs
Disgruntled borrowers can go to great lengths to spite their lenders. They can damage the property or choose to leave the property in a sorry state of repair and maintenance. There is also the issue of it being vacant for a long period of time.
Due to the factors mentioned above, the property might need significant repairs and renovations. Before making the purchase of a foreclosed property, we recommend that you have a portion of money set aside to meet potential repair needs. Consult the experts at Sapphire Capital Investment on how much of the sale price you should budget.
To maximize on the benefits that come with acquisition of a foreclosed home, you need a property partner with the expertise and experience in real estate brokerage and investing. Rely on Sapphire Capital Investment LLC.
Our team is dedicated and committed to offering our clients customized solutions that meets their personal preferences and financial goals. In addition, their experience and professionalism guarantees that we deliver on our promises on time.
Reach out to us today and receive an estimate of our services.