What a great great question!
Here's the answer...
"It Depends". lol
Here's the long and short of it. When you buy a foreclosed home on the open market... what I mean is not on the courthouse steps, you most certainly can get a loan. In fact, the banks want to loan you money... the real estate and lending markets drive a big chunk of our economy... so it's very advantageous for the economy as well as your bank account, to get a loan when you buy a foreclosed home. You can get an FHA loan, VA loan, or use conventional financing.
Without getting too much in depth... as an investor, you want to leverage your money as much as possible right? Let's say you have $1,000,000 to invest and the homes you're going after are worth $250,000. Well.... if you bought them all cash, you'd be out of business after 4 homes (or less because of closing fees). If you finance all of those homes, assuming 20% down, you can buy 20 homes before you're out of seed money (although most "conventional loans" will only allow you to finance up to 10 homes). Some of the taxes and interest on the homes can be written off (check with a tax professional for details) and you should be able to make a good return on your money with the rents you collect. I won't get in to numbers on this example but I did the math for myself and with all the benefits, my 4.875% interest rate was reduced 2%. Imagine being able to buy a foreclosed home for 2.875%. When you factor in the rents... you are getting the house for free... well... you're actually being paid to buy the house.
Why is that?? You are providing a service. The marketplace rewards those who provide a service.
Here's the other side of it... if you are buying a foreclosed home as your primary residence (to live in), you have just as great an advantage when you get a loan on the home. New home buyers and seasoned buyers alike have a great amount of benefits in home ownership. When you are buying a foreclosed home... now you're getting a home at wholesale and you're able to write off the interest you pay... again... bringing your total cost to finance wayyyy down (see the paragraph above).
When buying a foreclosed home at an auction at the courthouse steps... here's where the difference really comes in. This is why, at the beginning of the post, I said it depends.
Let me first clarify... I said "auction at the courthouse steps" because these sales are usually the best homes to buy. There are many auction houses that charge buyer premiums and are not selling the home at much of a discount. Often, these sales can be revoked by the seller because they did not meet their "minimum bid" which is almost never published. The type of auction I'm talking about is either called a "trustee sale" or "sheriff sale" because they are handled by a 3rd party and are literally done outside the courthouse on the steps. Some states allow those homes to be financed and some don't. Here in California... it's cash and carry. I'll explain this on another post.
When you buy a foreclosed home at the courthouse steps... your purchase is the actual foreclosure. There are some risks but if you do your homework you can really make a ton of money... or buy a great home at a drastic discount. This is the better place to buy homes especially if your plan is to "flip" them.
So.... If you have to pay cash for a house bought on the courthouse steps, how can you get financing on it? Well... you have to get the financing after you get the deed. You would own the property free and clear and then get a loan against it, which would then replenish your bank account. At which time you could do it again and again and again. You would definitely want to fix up the home before you apply for a loan.
If you're looking to buy a foreclosed home in or around Riverside, California... then you definitely need someone who specializes in that area. I specialize in Riverside, Corona, Lake Elsinore. Norco Hills, and Mira Loma. Get expert advice in these areas and let me roll out the red carpet for you, become a V.I.P. Buyer and get an edge when you Buy Corona Homes. If you want to search for repo homes in and around Riverside you can visit my site http://10BestRepos.com for Riverside Repo Homes.
She BANKED $2.4 Million In Just 14 Months
Investing outside of California and investing in real estate from your own home is way outside my knowlege base... but not Charrissa Cawley's. Click here for an Immediate digital download of Charrissa's ground-breaking training. You'll be directed to a page to fill in your info and request the training. In the training you'll learn what to do to become a Real Estate Power Investor! "Are You In or Are You Out?"
That's what Charrissa Cawley would say... In fact she does say it... and Charrissa makes a compelling arguement too. With the recent relaxation of FHA guidelines, in the 90 flip rule, she says there are no more excuses to not invest... Charrissa put it this way... "...those of you who have been waiting for the perfect time to begin investing need to do a gut check and make a real estate investing decision. You’re either going to start investing – or you’re going to kick back and talk about investing until all the best properties are gone and this unprecedented opportunity passes." She's sooooo right!!! I talk to "I shoulda" people all the time. Don't be one of "those guys" It's a waste of life. Either you're going to invest in real estate or you're not. -So you've gotta ask yourself... "Am I in or Am I out??" All my posts are based on investing in real estate in California... most specifically, my local market. That's because that's what I'm familiar with. So if you're investing in homes, whether they be foreclosures, short sales, or some other investment home, in California then you can glean a lot from my posts. If you're in another state... or you want to invest outside of your state, then read this post and learn from the master, Charrissa Cawley. If you don't know who Charrissa Cawley is, then here's a quick bio... Stay at home mom turns Multi-Millionaire, in 14 Months... that's right... she started investing and earned 2.14 Million Dollars in just 14 months. Now she's giving back. She's a seminar speaker and a real estate investment trainer. She's training on real world, current, Real Estate Investing strategies and her students are making a killing too. Charrissa is allowing people to get thousands of dollars worth of material for a low introductory price. Grab your copy now... I hear the price is going way, way up after the launch. -- This Is Cool -- Charrissa is teaching people how to invest from the comforts of your own home... I'm not talking about the training... I'm talking about actually buying the homes - while at your home. You can become a skilled real estate investor without even having to be on location for most of your deals. This is the beauty of remote access and virtual assistants... I'd also like to add that NO MATTER HOW BAD the recession gets, it's times like these that turn our markets upside down which opens up a plethora of opportunities out there for property investors. Basically, right now there is an absolute gold mine out there which I and many others are capitalizing on. In fact we are doing a good thing by keeping the RE economy sector moving forward and stopping a domino effect of further chaos to some degree... So no, there is no need to ask; "Charrissa, is your business suffering right now?". Because the answer is "no, my business is booming during this downturn." Here's a question Charrissa asks: "Are you currently 'happy' with your day to day routine? Would you live your life a little bit differently if you didn't have to worry about having enough 'time' or 'money' to make sure your family and future were secured? If you're like most people, you would do ANYTHING to finally be able to drop that crappy 9-5 'just over broke' job, and generate three times the amount of money you do now, with only 1-2 hours of real work a day working for nobody but yourself. Imagine the freedom, no staff, no office, no boss, and no more 'routine'..." This would mean time with your family, time for vacations (and the money to do it!), all those goals you've set for yourself financially turning into reality, and let's face it - just a much better, less stressful, and more rewarding day to day life! Sound good? Let me tell you it's more than good, it's GREAT! Charrissa has been living this dream for a few years now and watched hundreds of her students grow to be huge power investors under her wing. The best part is, these are NORMAL and EVERY DAY people just like you, they're not Harvard graduates, they are not the 'top of the business class', they simply have a heart, a brain, and a passion to finally take control of their lives. IT DOESN'T MATTER what your experience level or background is with real estate, the information that she has to share with you has the power to dramatically change your life for the better in under 30 days.
You'll learn all you need to know, like "The Four BIGGEST MISTAKES New Investors Make" No Matter What - Don't Let This Happen To you!. Mess these up and you'll NEVER make it in this industry.- The market: Never invest unless there is a STRONG rental market with good potential for long-term positive cash flow/income. Weak markets often predict short term risky returns with little room to maneuver.
- Do NOT overspend on your investment. Meaning that if you can't get it at a great price, DON'T TOUCH IT! No matter how much 'future appreciation' a property might have, this is asking to get burned later!
- STOP CHASING the same dime. Motivated sellers CAN be a little goldmine if you focus on them exclusively, however this is going to eat up your time, and you are going to find yourself in a bad deal sooner than later. I have a turn-key system that goes far beyond the success of quick movers & shakers.
- Too much talking, not enough walking. This was the hardest one for me to get over, stopping my research and simply TAKING ACTION! Too many people talking a big game, and even if they truly know what they are talking about, nothing attracts success more than being a motivated go-getter that doesn't talk too much, but acts fast, swift, and often.
Monday, March 22, 2010
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wow thats awful lots of money to earn from property investment
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