My Foreclosure Theory ? What do you think ?

Question

Foreclosures are up all over the nation and I believe that people will own so much money on these homes/multi familys etc.. that when they go up for auction, they won't be a deal because they simply won't be worth it because of the huge loans on them. The real deals in my opinion are going to be the homes/ multi familys that are around the foreclosures and there value will decrease a lot because of the huge amounts of foreclosures. What do you think ? all opinions are welcome ........

Derek Guyer · Answer

I definitely believe that bank-owned properties have a ton of value for investors all across the country, but because most investors are placing the emphasis on these and flooding these areas of the market, the home-owners are left with properties they can't sell because everything around it is going for so much less. In this case, you get a home that is usually in much better condition and a motivated seller as well.

As for the mold issues, I've run into them several times myself and have been talking with different mold specialists and they say this isn't half as serious as everyone acts like it is. They say the best thing for an investor is to have contact with someone who knows what they're talking about in the field and to get free estimates on that type of work to ensure that they know what they're getting into before they stick their neck out. As always, the key is information and networking to ensure you get the right deal based on the right information.

If you have more questions about that, I can put you in contact with several people who may be able to help you.

Derek

N/A N/A · Answer

As of right now i'm not too thrilled about forclosed properties, especially if they've been vacant for long periods of time. we have so many up here in Michigan and I'm not opposed to buying or listing them, yet there does seem to be many problems with forclosed properties legaly (Who is responsible for the property?) I thought the bank was?, Now I hear that is not the case?

Has the property been neglected to the point that there is a mold problem? mold is a serious issue, and we have cold winters and warm summers up here, i was in a home recently that stenched of mold.
There are different kinds of mold, and that is an issue in and of itself, personally I don't want to deal with any mold odors at all.

I would much rather list or purchase a property which is owned by a homeowner/investor than one that has been forclosed, that's where I'm at with forclosed properties right now, yet that could change as my knowledge increases.

Ryan Webber · Answer

See I would think that as REO's stay on the market longer and longer that banks will be more willing to discount them at foreclosure.  I have already seen this sporadically at my local foreclosure.  Sometimes the note holder will discount the owed amount by 20-30% to start the bidding at.  I would have to hypothesize that they just don't think that it is worth taking back for the full amount owed.  They would rather sell it at foreclosure and not have to worry about it anymore.

Derek Guyer · Answer

Wow, I can't agree much more. This has long been my reasoning for finding the deals I have been for my investors. I constantly refer them to bank-owned properties, but am much more intrigued with the nature of the starving investors and home owners who can't move their properties in those types of markets! That's what Land Chasers has been all about!

That's not just a theory, BSM. I have personally seen the reality of that truth.