Los Angeles Investment Property: Three Ways to Buy Foreclosures
Real estate entrepreneurs or investors know that there is a way for you to get into the business without investing in a lot of money. This best kept secret that is said to be lucrative once you know how is known as the purchasing or acquiring foreclosures. There are ways on how to go about this especially when you are interested in Los Angeles investment property foreclosures. It basically depends on the particular time when you would like to enter into it. Each method has its own merits and success will also depend on your knowledge level or expertise in the real estate business.
1. Purchasing BEFORE a foreclosure auction When you plan to buy a Los Angeles investment property foreclosure and would not want to compete with the more experienced people in the business, it is better to do it during this time. Competition is lesser, and there may even be times that you will have nobody to compete with. A short sale is done when you buy the property even before the foreclosure auction. However, it is also here that profit is minimal since it will depend on the amount that the bank is willing to negotiate. Though competition is lesser, it takes much of your time and effort in order to close the deal. It can also be the most emotional for the property owner or homeowner since they may have the misconception that since it is a transaction before the foreclosure auction, there is still a possibility that they can keep their homes. If you are not the type of person who can squarely face an emotional homeowner after the deal is closed and tell them that they cannot have their property back, then do not go into this method.
2. Purchasing DURING a foreclosure auction The word is already out that the Los Angeles investment property you are interested in is up for grabs. This means that you have to brace yourself for you will definitely encounter tough competition. Competitors will include those who are new in the business and would like to try their hand in buying foreclosures. Banks will also give you a hard time since they would naturally want to acquire or get their properties back. Aside from too much competition, the problem with this method is that you may not have the option to inspect the properties prior to closing the deal. So, you would not really know if you’re going to get a handsome profit for your purchase or if repairs on the property will reduce your profits. Those who are new in the business better stay clear of this method since it may not turn out to be profitable at all.
3. Purchasing AFTER a foreclosure auction This is when the bank was able to buy back the foreclosed property. The property is now termed as REO or Real Estate Owned. This is the method where you have a higher possibility to acquire the Los Angeles investment property that you want. Work is lesser and so is competition. This is where you can get the most from your investment since it is here that you can get the best deals. In order to do this though, it is highly recommended that you get guidance from real estate investors specializing in this field. With their help you will know the proper ways on how to buy Los Angeles investment property foreclosures.