The old saying about the rich get richer has never been truer than it is right now. If you have some money to invest, you can make a real killing in the housing foreclosure market. There are many investors who look at today’s crisis in the foreclosure market as an opportunity to make some fast money. For other investors though, this opportunity which comes at the expense of average, working families is harder to take advantage of. If you count yourself as part of the second category, here’s how to make money on foreclosures and still sleep at night.
Many of those who stand to lose their homes to foreclosure are good people who have been caught in the midst of a bad situation. Many foreclosures occur when people lose their jobs in our struggling economy. Some foreclosures occur as a result of subprime interest rates and the resulting deflated values of housing. As an investor in real estate realize that you didn’t create the problems and there’s not much you can do to solve the problems either.
But there is a way that you can help and still turn a big profit. You are buying lots of houses for only pennies on the dollar, so in actual fact you have very little money that is tied up in any house. Here’s how to help.
Purchasing a number of homes in a single community gives you a few options. One thing to do is to try to search out another investor to sell these properties to, in bulk, for a profit. Or, you could do nothing and basically sit on the houses until the crisis passes and the market once again rebounds. When that happens, you then sell for a profit. The third possibility would be to rent out the houses.
When people are losing their home in the foreclosure process, they do eventually have to move out. When this occurs they have to try to find a rental unit, or move into the house of a family member or friend, or still worse find out they have nowhere they are able to go to. Not one of these scenarios is ideal, especially when children are involved. A much better option for them would be to lease a house at a cost they could afford.
This could be a perfect situation all around. Being able to rent out these houses that you’ve bought can help at least cover some expenses and possibly even make a profit. Insurance costs will be less when a house isn’t vacant. When the economy recovers, you can then sell and make even more.
The other side of the story is that families have good places to live at a price they are able to afford. Think about giving your tenants the first opportunity to purchase the house at an agreed upon price, once their financial situation gets better. The price you negotiate will be more than you paid when you bought the house under foreclosure, but still a good deal for them.
If you decide to do this, it’s going to be way more likely that your tenants will be sure to take good care of your property because one day it might be theirs.
When the day arrives that they’re in the financial position to buy, you may want to give some thought to holding a private mortgage. If they’ve been able to meet their financial rental commitments on time, you could simply maintain the arrangement so they end up still paying you. That way there won’t be any problems with them trying to get a mortgage just because they suffered through a foreclosure.
You might be reading this article and think it’s a crazy idea that wouldn’t work. But you would be wrong. This idea has already been used by a few savvy investors.
When interviewed recently, one investor told the interviewer that it makes him feel great to help out people who have already been devastated by foreclosure. They can have a nice place to raise their kids. He’s able to collect rent and he also knows that the bulk of his profit will come whenever he sells the house.
If these investors can do it, how about you? Make money on foreclosures and still sleep at night. What a great concept.
You can make lots of money if you know the ins and outs of buying foreclosure properties buying foreclosure properties. Go to getforeclosurefacts.com to learn more.
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