Not all banks are the same when it comes to foreclosures either. Every bank and every transaction is going to be unique. The bank is looking at market value of the home, how much is outstanding on the loan, health of the local market and how long it takes for a property to sell, their larger outstanding portfolio, internal policies, investor restrictions and potentially a host of other factors that play into the decision making process. So, how to you break down these walls and figure out how to get a good deal on an investment foreclosures?
Q: How do you get the biggest bang from your foreclosure purchase?
First of all, "hire" one full time Realtor ® who is active in the current market and whose portfolio includes investors. Having a Realtor who also personally invests in Real Estate is a good idea, but at very least you need a Realtor ® who has investor clients and understands investment real estate.
Secondly--Prepare for your purchase.
- Know your budget range upfront. If you don't know your budget, you will not be able to get started. This is not something you should figure out later.
- Know how you are going to finance the loan. Get pre-approved from your Realtor's recommended lender upfront--not after you find a house to purchase. If you need to move funds around to buy the house--do it now. Don't wait.
- Know your exit strategy. Will you lease for 3-5 years and then sell? Can you afford to just break even on the monthly rent/mortgage payments--if so, consider a 15 year loan for faster property equity.
- Don't let your Realtor ® be the only one looking. Log in and look for homes everyday and scourer the available listings daily. When you see one that looks promising, contact your Realtor immediately to get his input.
- When a house hits the market that looks viable--go see it within 24-48 hours. If it looks great--go see it that day. Don't wait.
- When you find the property that meets your requirements--make an offer that day. Don't make the mistake of waiting. Even one day can be the difference between being the offer of consideration or being one of many offers. This may be the most important piece of advise I can give to a new investor. Don't hesitate.
- Build a relationship with your Realtor ® so that he is always thinking about you and knows that you are serious about your investment strategy and needs. If your Realtor ® knows that you are ready to pull the trigger immediately and that you have a realistic expectation of the market, you will get a lot more of his time and attention. Your Realtor ® wants to help you, but Realtors ® only get paid if you buy and investment properties are not huge revenue for the Realtor ®--so your Realtor ® needs to know that you are ready to pounce on a property when the day comes.
- Get your Real Estate news locally. Don't just listen to the national news or read the news for one part of the city and assume that it applies to the area where you are buying. It most likely is unrelated information. This is another reason why your Realtor® needs to be well connected to the market and you need to be well connected to your Realtor®.
Call me. Let's Talk.