We love the ugly and awful.
There are all kinds in real estate investment. All kinds of real estate investors, all kinds of deals and all kinds of property to make a deal on. You’ll definitely find that having all kinds in this business makes for a great amount of variety and plenty of opportunity for earning profits.
There are three basic ways to make a profitable deal in the real estate investment industry.
1. Pick up a Pre-Foreclosure
2. Pick up a Property at the Foreclosure Sale
3. Pick up a Post-Foreclosure
These are the three states of the defaulted property before it usually ends up back on the market as a classic home for sale with a real estate agent. A pre-foreclosure involves finding homeowners who haven’t been keeping up with their payments and working with them to buy their home, while also getting them out of their defaulted mortgage.
The foreclosure sale is where you can go to pick up mortgages and properties that have already been foreclosed on by the bank. A post-foreclosure is a property that didn’t sell at the foreclosure sale for whatever reason and has gone back to the bank.
These last properties are usually undesirable for many reasons. They may look bad, need a lot of repairs, may have a very high mortgage to cover or even have an IRS lien placed on them. The real estate investor must realize that banks are not in the business of real estate. They are in the money business. In fact those post-foreclosure properties in a bank’s portfolio are listed as non-performing assets. The banks don’t want them!
Give Us your Poor, Your Tired, Your Huddled Masses…
In real estate investment you’ll come to love those properties that are in disrepair. These properties are not attractive to the general public, or those people looking to buy a home to live in. Once a home becomes ugly and awful, you’ll find that it’s pretty much only attractive to the post-foreclosure property investors.
As a property grows more and more neglected, fewer and fewer investors will be interested in that property. However, this ugly and awful property is also an excellent way to get a major discount from the bank or the homeowner. You can ask for multiple discounts on the sale price of a property because of shabby appearance, neglected maintenance, problem placement of the home on a lot and more.
Don’t turn down a property deal just because that home looks ugly and awful. In a business with all kinds, the leftovers can really turn out to be diamonds in the rough. If the safety inspection shows the home to be sound and termite free, then you can bet that a property that just looks bad is a great property investment.