If you are looking for a fixer-upper or just a good deal, foreclosed properties can provide great returns on your investment dollars. Beth has ten years experience helping real estate investors buy and sell properties. Every foreclosure, regardless of type, is listed for sale by an agent on our multiple listing service (MLS) agent site. We can select foreclosures by bank type, exclude or focus on short sales or pre-foreclosures, and add over 300 other unique criteria. Using a REALTOR to help you scout properties and make offers is critically important to your success in getting the best property for the best price. There is more risk involved in purchasing a foreclosed home from a bank but there can be more reward as well. When making offers be sure to read the special addendum carefully for additional buyer requirements or buyer protections that have been eliminated. They are different for every bank and these addenda replace the NC Offer to Purchase and Contract so make sure you and your agent understand what is required. All bank foreclosures are sold through a bid process so expect multiple offers. There is a very short window for inspections and appraisals and your earnest money might not be refundable. A public site Realty Trac has some good statistical and “how to” information, but it costs a fee to get all the information and the inventory can be stale-dated. Best advice – use an experienced REALTOR to help you.
HUD Listings or HUD Foreclosures
A HUD home is a house that was financed by the previous owners using an FHA loan but has now gone into default and foreclosed. FHA loans are guaranteed by the government (Federal Housing Administration or Freddie Mac ) so when they are repossessed by the trustee for that loan servicer they in essence go back to the government. In order to purchase a HUD home, you must have a HUD approved broker who will have access to place a bid on your behalf with the HUD site. You can search that site here for Charlotte area HUD homes but you cannot place a bid without help from a HUD approved broker. Not all real estate agents can do this so ask. Beth is HUD approved and has sold many HUD homes over the years. It is important to choose a experienced agent so that you can win bids without overpaying. These are also listed on MLS.
Did you know you can buy HUD homes with only $100 down – sometimes even just $1?? You can even purchase them with the money to pay for your improvements or upgrades using an FHA 203(k) loan. If you are a police officer or fire fighter, EMT or teacher you can buy certain houses with a 50% discount! Ask Beth for a lender referral who knows how to streamline these loans for faster service.
These Veterans Administration foreclosures are VA loans that have defaulted and are listed on MLS. Since these foreclosures have specific information attached to them which is made available through the REALTOR MLS site and can be provded by an agent, it is faster and more efficient to use a REALTOR to find these for you.
If you are rehabilitating property and need to resell, knowing what kinds of loans your potential buyer could use will help your agent market your property. These USDA loans are not for investors but primary home owners. Primarily used for homes in agricultural areas and with certain income limitations, these loans provide 100% financing and a very low private mortgage insurance rate. To see if your home might qualify, go to the USDA Eligibility Map and enter the address.
Condominiums and Townhomes for Investors
There are many factors to consider when looking to purchase a condo or townhome for investment purposes. I recommend several things. First, use a REALTOR and a very experienced lender. The first thing an investor should check before buying is if this potential investment could be purchased by an FHA or Fannie Mae buyer. Why? Because it affects value. Within the last five years, many condos and townhomes have been foreclosed which affected the eligibility of the complex or building to be approved for FHA financing. Check your site here. If you are a cash buyer, still check with the best mortgage lenders to make sure the unit you have in mind can easily be financed when you choose to sell it. Check wtih the HOA to make sure they are well funded. Get a copy of the annual report. Find out exactly what the HOA fee covers, what the community asessments might be, is there any potential litigation with the HOA and always read the Bylaws and CCRs. I still contend buying a single family home is usually the best real estate investment for the average investor. But occasionally a really great condo or townhome deal comes along and doing your homework will make it a great investment as well.