The following is excerpted from an article titled “Buying Foreclosures As Rentals” in the August issue of the Foreclosure News Report, You can get the August issue free and read the entire article, along with other award-winning content, if you sign up for a free trial subscription to the Foreclosure News Report in the next 30 days.
Like any veteran investor who has been in the business for the long run, Gene Richards knows the markets he invests in very well and the types of properties he can buy in those locations. In his hometown of Burlington, Vt., for example, he likes the section of town between the university and downtown. But there is no advantage to buying foreclosure property because there are too few of them in Vermont, and the ones that are available are too expensive, so he sticks with traditional sales and now owns 21 homes.
The scenario is different in the Cape Coral-Fort Myers area of southwest Florida where Richards owns 17 homes. There, bank-owned homes and short sales are still plentiful and very affordable.
For Riverside, Calif.-based investor and trainer Bruce Norris, his career has run the gamut from buying pre-foreclosures directly from the homeowner, to bidding at foreclosure auctions on the courthouse steps and buying REOs directly from the banks. However, a property doesn’t have to fit neatly under the definition of “foreclosure” to make for a good deal.
“It doesn’t have to be under the title of foreclosure,” Norris said. “Thirty to 40 percent of everything I bought in my life didn’t have a loan…it had a situation. Going forward there’s not a lot of foreclosures. This time you have the lender’s cooperation more often. Lenders are paying owners to cooperate with short sales, getting like $30,000. Basically, that’s one heck of a cash for keys!”
Location is one key to buying a property when an investor is in the buy, hold and rent business mode. To find out what else is important to investors from around the country when it comes to working their markets in search for rental properties, read the entire article featured in the August issue of the Foreclosure News Report.
Here are some other articles that may be of interest to you as well from the RealtyTrac newsroom:
How to Eliminate Taxes from All of Your Real Estate Deals
Luxury Foreclosures on the Auction Block
Is the Foreclosure Crisis Ending