Getting to finance foreclosure and short sales is a primary reason that most “would be” investors never get on the incredible action. Usually, most properties sell for an average of 70% of their current market value. Most of them go unsold and enter the realm of real estate owned by the lender who issued the original loan. The key reason behind never purchased these properties is the lack of knowledge in the real estate industry on how to secure financing to buy them.
Private lenders are the first instrument for buying these properties at foreclosure sales. There are two methods to secure these funds. The first thing is to leverage a personally owned property with equity in it before the sale and use these funds to finance the deal. It is the simpler of the two methods for the investor. The other one is more complex. The investor must find a hard money or private lender, inform them of their intentions and get them to finance the majority of the purchase. Below, I will provide a tried and actual method of accomplishing this.
•Recognize the property that you to buy at the sale. Ideally, this will be a property that was bought several years ago and has lots of equity remaining in it.
•Inspect the property and look for any sort of harm that will increase your rehab expense.
•Do some work in advance so that the lender knows the property has no encumbrances.
•Make sure to do insurance work in advance so the property can be insured within hours of making investment.
•Have the entire mortgage documents from the lender done in advance with just the loan amount omitted. With this way, after the bidding has taken place, you can quickly go to the lenders place of business, sign the documents, pay for the home insurance, and attain the check to complete the sale at the courthouse.
•Complete you Rehab as soon as possible, refinance into a usual loan, and obtain the rewards of being a triumphant foreclosure investor.
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