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Foreclosure investment has drawn
more attention lately due to rising
interest rates on adjustable and negative
amortized loans. Also, higher property
taxes, un-rented vacant homes, and
unemployment have contributed to this
activity. Foreclosures and pre-foreclosures
are a great way for real estate investing
professionals to obtain properties
at depresses prices.
When outstanding loans or obligations
against a property are greater than
what the property can be sold for,
a short sale may come into play. For
owners who can no longer afford to
keep mortgage payments current, this
may be an alternative to foreclosure.
The respective lender must agree on
the short sale and by doing so, is
agreeing on accepting less that the
total amount due on the property.
A lender will not approve a short
sale if it would make financial sense
to foreclose. Similar to foreclosures,
short sales provide investors with
great opportunity to get a good deal
on a property.
For investors looking to purchase
a home in a particular real
estate market, researching for
areas where supply exceeds demand
may lead one to a buyers market. Buyers
will have more homes to choose from
in this type of a market and thus
will increase the chance of finding
a cooperative seller. Sellers in distress
will tend to contribute incentives
such as seller paid closing costs,
repair costs, and/or even "cash
back" at closing.
Real estate investing may also lead
an investor to pursue a 1031 Exchange
(also known as a Like Kind Exchange).
This is a way of structuring a sale
so that the seller's profit is not
currently taxed. Instead, a property
is replaced with a like kind property
and thus the respective gain is deferred
to a future date. Since the taxpayer
is merely exchanging like kind properties,
there is nothing received by the taxpayer
that can be used to pay any respective
taxes.
Investing in real estate can be a
rewarding experience if properly researched
by an investor. However, risks to
be wary of include buyer demand factors,
interest rate increases, and re-acrruing
maintenance factors.
Additional Key Terms Include
Appraiser
Process Explained - Certified
and Licensed Appraiser - Learn
how the appraiser process is performed.
A licensed real estate appraiser uses
his or her knowledge of the real estate
market to derive at property value.
Real
Estate Appraisal - Explanation
on the Inspection and Report -
Read how a real estate appraisal is
used to develop an opinion of value.
Real
Estate Agent - Realtor Guidelines
and Ethical Behavior - Explanation
on real estate agents and how they
must acquire a real estate license
to represent a buyer or a seller in
a real estate transaction.
Real
Estate Investing - Information
on Foreclosures- Explanation on
real estate investing and the purchase
of real estate for profit.
Commercial
Real Estate and The Real
Estate Market - Learn more about
commercial real estate and how it
can be bought or sold in the real
estate market.
Real
Estate Development - Modern
Architecture and Structure - What
is real estate development. Learn
how developers are usually in the
form of a company such as a corporation,
but can also be an individual or partnership.
Real
estate law - Including The
Real Estate Contract - Read up
on how real estate laws vary significantly
between jurisdictions.
Real
Estate License - Appraiser,
Realtor, and Mortgage Broker -
Explanation on mortgage broker, real
estate agent, and appraiser licenses
and how they must be updated with
continuing education.
Real
Estate Market - Updates on
the Condition of the Market -
How do the real estate agent, property
appraiser, and mortgage broker affect
the market.
Real
Estate Appraiser Jobs - Trainee
and Experienced Appraisers - How
do you become a property appraiser?
Click here for further information.
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