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Foreclosure Opportunities for Investors
Author: Chuck Marunde15 Oct
Everyone knows foreclosures are up nationwide, but there are several states with very high rates that push the national average way up and push this news to the frontpage.
“The highest rate, for the ninth month in a row, was in Nevada, which had 1 filing for every 185 households. Florida was No. 2, with 1 filing for every 253 households, followed by California with 1 for every 253 households. Other states with foreclosure rates in the Top 10 last month were Michigan, Arizona, Georgia, Ohio, Colorado, Texas and Indiana.” Providence Business News, Chart Couresy RealtyTrac, Inc.
We have not seen such high foreclosures in Washington State. Certainly, we will see more. While a foreclosure is sad news for the homeowner being foreclosed upon (because of a loss of a job, divorce, or some other major financial crisis), it does present opportunities for buyers with cash. During any kind of downturn in real estate, the old rule still applies: Cash is King!
If you do have funds to purchase foreclosures, please be aware of the traps for the unwary. If you haven’t been buying foreclosures for years (and even if you have), you would be well advised to get help from a professional who understands foreclosures and how to purchase them at the lowest possible price SAFELY. See help elsewhere on this site on buying foreclosures.
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3 Responses for "Foreclosure Opportunities for Investors"
What are some of the traps or pitfalls in buying foreclosure properties?
Good question. There are many traps, and I’ll write a full article on this, but here are a few. 1.) I had a client who came to me after he thought he bought a house at a foreclosure sale, but he actually bought a second mortgage. The first mortgage balance was more than the house was worth. He lost his $50,000. 2.) I know a gentlemen who bought a foreclosure only to find out later that a substantial number of the beams under the house had to be replaced because of rotten timbers. He said after all the money and time, he will be lucky to break even. 3.) Buying pre-foreclosure or negotiating a great price on a house prior to the trustee’s sale could be great, but a purchase can be subject to unknown subordinate mortgages, mechanic’s liens, labor liens, federal tax liens, assessments, and judgments, not to mention possible permit violations, boundary disputes with neighbors, easement or access problems, adverse possession claims or easement by prescription claims, and about 100 other possible legal issues. It’s dangerous out there. Be careful.
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