Foreclosure City has created the perfect storm in many major cities in the U.
S.
- the perfect storm for investors to find great real estate deals, that is.
Large inventories, low interest rates and homeowners hungry to sell all make certain cities ideal for picking an affordable home or two.
Before you break a leg rushing out to buy that bargain real estate, however, you'll want to keep in mind the most important factors in a successful real estate deal.
Location, condition, price and financing are all consideration you'll want to keep in mind in order to successfully find and acquire a great real estate deal.
If you're looking to buy rental property that will be paid for monthly, then you may want to set your sights on lower-middle-class areas.
Most owners who occupy their homes in these areas keep their homes well maintained.
Although you'll want to avoid obvious signs of a bad neighborhood, like boarded up homes or gang graffiti, accessible transportation and recent signs of construction can translate into good income on rental properties.
It is important to note that prospective renters with children will want to live in areas with good public schools.
Neighborhoods where homes are similar in size and have similar amenities are also preferred, along with areas where homes are mostly three-bedroom, two-bath or more.
Homes that are less than ten years old are more favorable, since almost all of its systems will be current, and no major renovations should be needed for some time.
If considering a home more than 50 years old, make sure all systems have been updated, from wiring to plumbing.
If not, you're going to be investing a lot of money on repairs.
The ideal situation would be to purchase a home that does not need repairs; however, there are an abundance of homes on the market today that need significant repairs, but can be bought at bottom basement prices.
Many are owned by the lender, and are uninhabitable.
Others may not need anything more than a coat of paint or new carpet.
If you decide to make an offer on a home that you think is in need of repair, make sure you make it contingent upon the inspection of the home, along with an acceptable estimate for all necessary repairs.
Price may not be that easy to determine, since the sale of so many distressed properties have negatively impacted the sale price of all homes in the area.
Bank-owned properties are in need to be sold, though.
Banks are interested in holding property; they are interested in making money off the property based on interest.
Many have been willing to take a loss on property just to unload it.
Your target on a bank-owned property would be to offer 50 to 60 percent of the listed price, depending on the condition of the property.
The more work that needs to be done, the deeper the discount you ask for.
That will give you a starting place for negotiations.
Your final frontier to conquer in your investment is financing.
Fannie Mae may be where you'll want to start on your quest for financing.
Also, check with your local lender.
Mortgage brokers often can find you the very best deals on interest rates and many can be located easily on the web.
Just make sure they are reputable.
Ask for all fees in writing prior to signing anything.