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Foreclosures
Foreclosure happens when a homeowner stops making payments to their mortgage company, for whatever reason, and the mortgage company repossesses the property according to legal rights signed over when the loan was first established.
Once the foreclosure goes through the legal system and a judge awards possession to the lender, the property is usually sold off in order to pay back the loan and get the lender out of the business of being a landlord or homeowner. Because the bank or mortgage company is just trying to recover lost revenue, foreclosure property often sells at a deep discount to actual current market value, and investors often buy foreclosed properties and make instant profits.
To find foreclosed properties in your area, visit a Realtor who specializes in them or go to the courthouse and look at the posted announcements of foreclosure sales. Then show up, bid, and be prepared to pay on the spot or within a matter of days. But beware of the hidden costs of foreclosures. Some carry liens for back taxes, for instance. You might buy a house for 50 grand, and then get a bill for back taxes attached to the property from the IRS, for another 50 grand. Research the history of the property, understand what you're buying and if it comes with strings attached, and then bid with confidence.
Real Estate Investing |
