Investing in real estate can be a great way to earn residual income. Even when the housing market dips, people still need to live somewhere. You can take advantage of fluctuating market prices to find the right foreclosed or REO home for investment. Purchasing this type of home is usually the best option for investment because you are likely to get them significantly under market price. If you are interested in purchasing REO (bank owned) property for sale in South Jersey, here are a few things you need to know first:
One of the best parts about purchasing quality real estate in South Jersey from a bank is that you do not have to deal with the homeowners. Understandably, homeowners become emotionally attached to their homes and may try to haggle the price based on emotional perception. This is particularly true if you attempt to purchase a home while the homeowners face foreclosure. Dealing directly with the bank allows you to ignore the emotional backlash and focus strictly on the financial aspect of your investment.
Choosing a reliable South Jersey real estate lender makes it easier for you to get a property at a price you can live with. The more money you save on your investment purchase, the more money you have to improve the home and sell or rent it for income.
When you purchase foreclosure homes for sale in South Jersey from a bank, how much you pay for the home is public knowledge. This means that future homeowners may have access to the information and try to haggle you down on the price to maximize their savings, which could result in less profit on your end. If you choose to rent the property this may not be as big of a concern, and many homeowners may not know about this information. However, lenders and South Jersey real estate are typically more informed.
Another concern is that banks may require more proof of financial solubility when you purchase South Jersey homes for sale through them. For example, if you make a cash offer on a home, you will likely have to provide financial statements showing that you have enough money in your bank accounts to afford the property. If you plan to get a loan, you will need a preapproval letter before you can make an offer on a home. This is fairly typical procedure but it may feel like an invasion of privacy.
Access to Home Inspection
When you purchase foreclosed or pre-foreclosed real estate South Jersey, there is a risk that the homeowners will not be willing to spring for an inspection since they are likely losing a lot of money on the house anyway. If you are purchasing the property for investment purposes, having access to a home inspections is essential. Purchasing South Jersey real estate for a discounted rate will not do you much good if you have to spend thousands of dollars dealing with unexpected damage, mold or other infestations. Access to a home inspection will let you make a purchase decision with open eyes so you come prepared for the work you will need to do on the home.
Purchasing foreclosed homes for sale in South Jersey through a bank ensures that you have access to everything you need to know about the property before you purchase it. Additionally, bank owned properties are empty. This means that you will not have to worry about navigating homeowners or tenants while you look through the house or schedule a time to look at it. This provides more freedom and accessibility to examine the home thoroughly.
Lots of Competition
Investing in real estate is a hot business because it can be extremely profitable. One drawback to purchasing REO properties is that there is a lot of competition. It is likely that you will have to make a bid for the property. You can help offset this risk by working with the best South Jersey real estate company to find you the best properties with the best chance of success.
Because banks understand the popularity of real estate investment and understand the housing market, you are not as likely to get rock-bottom prices. You will likely save quite a bit of money, especially if the home needs a lot of TLC, but you may not save as much as you think. You will have to decide if the benefits of working with a bank outweighs the complications of dealing with homeowners for potentially bigger savings.
Work with a great realtor
Whether you are new to real estate investment or you have been around the block a few times, working with the best South Jersey realtor can make finding the right investment properties a lot easier. Let us help you find the best REO or foreclosed property for investment. We can help you save money on your investment purchase and we can help you navigate the, sometimes complicated, waters of REO bids, paperwork and financial requirements. With over 20 years of experience in the Jersey real estate sector, we understand how to find the best neighborhoods, the best homes and the best deals. When you are considering real estate for a future investment, choose a South Jersey realtor that can help you tackle every aspect of the investment. Call us today to set up an appointment and we can get started on finding your new property.