Foreclosed Homes ( Good or Bad Idea)

9 Replies

If you have cash and experience, they can be a great idea. If you don't have cash and/or don't have experience buying sight unseen, doing ARV analysis, understanding the block dynamics and appreciation in the area, they are always a bad idea. There are some REO deals that can be financed, but most all foreclosure options, from courthouse steps to auction sites, will be won by cash deals with quicker closings.

@Zack Williams

I have bought many foreclosures and you can get some great deals.  Buying direct from the bank is the best method.  The banks foreclose and then hold them (shadow inventory).  Approach some smaller local banks in your area.  Cash is of course best.  Many foreclosures are not habitable for one reason or another which makes it difficult to finance them.

@Jonathan Greene Thanks Jon, I appreciate the help . I'm currently trying to learn as much as I can about the whole process. I feel like it's pretty hard to get a idea of the appreciation in any area at this point with everything going on, but I could definitely be wrong on that.However, I understand that its vital to have knowledge of the areas you mentioned in order to have positive outcome. Thanks for the help.

@Kenneth Garrett Thank You Kenneth, what would be a good way of reaching out to a smaller banks with foreclosed properties? I have a partner that I work with who's able to provide an all cash offer but is it realistic to make a 100k plus profit on foreclosed homes in certain areas ?

@Zack Williams

You still need to analyze the deal.  You can make nice profits, you could make 100K but you’ll need a smoking deal.  I would say that is not the norm.  There are many factors that go into it.

@Zack Williams , They indeed can be a good deal. Remember what makes a deal good is the numbers and conditions making sense, doesn't matter where it comes from- Probate, Divorce, Liens, Judgements, Disrepair, downmarket, upmarket.... whatever the case, as long as the numbers and the conditions are good- you should be ok

@Zack Williams I forgot to say that you most likely will have to cash finance. Conventional funding rarely (if at all) works for foreclosure types. But worry not, the sea of Hard Money, Investment Money, Private money is great, especially if the deal is good.

@Kenneth Garrett Thanks a lot Ken for your response. 

@Joanne Eriaku Thank you Joanne, I will definitely make sure the numbers and conditions make the most sense in all my investments. Are there any hard money or private money lenders you would recommend? 

hope everyone is enjoying their Memorial Day weekend. stay blessed 

Originally posted by @Zack Williams :. Are there any hard money or private money lenders you would recommend? 

For info on how to find Private money, I recommend the Bigger Pockets book, "Raising Private Capital" by Matt Faircloth. There are many of us PMLs out there, and we are looking for 3 things: a) low-risk deal providers who b) know how to put our money to good use, for c) an agreeable rate of return.