The global economy crisis in the last few
years has provided perfect conditions in the development of a new real estate market, that of foreclosures. A tragedy for many people, foreclosure is
considered to be a bargain by others, who take advantage of these lower costs
properties and sell them at an under the market price, but which brings them a
lot of profit.
To be honest, maybe foreclosure market has
been one of the most active real estate markets in the last 2-4 years,
providing a chance to buy too many people who otherwise may not have had the
possibility to do so. It has been a great business for many investors who have bought
properties at low cost and the sold them with the average market place.
However, there are real estate agents and also media geniuses that helped
people throughout this recession period to avoid the downsides of buying a foreclosed
property.
One of these people is Dean Graziosi, a known
and valued wealth guru, appreciated by many for his upstanding career and
vision on real estate markets and for his ability to adapt during recession
time, without any loss to him or his company. He drove an awareness campaign
for those willing to buy propertied under foreclosure, no matter if they were
investors, or simple families in search of a new place to make and call their
home.
The first details to be looked at, considers
Dean Graziosi, and is hidden repair costs. A property, especially residential
estates that were under a mortgage hasn’t usually been maintained up-to-date,
due to mortgage payments required. There can be quick fix maintenance issues,
but some rehabilitation works can go up to $K45 in some markets, considering
that the average bathroom renovation goes around $3,500 and kitchen renovation
goes up to $6,000.
All these matters have to be taken into
consideration when buying a foreclosed property for personal or reselling purpose, as you must have a separate
budget dedicated to repairs and updates. A second aspect
that must be taken into consideration, says Dean Graziosi is the neighborhood
where the property is. Although you can find foreclosures in even high-rated
neighborhoods, analyzing the percentage of foreclosures in a target
neighborhood are essential, as these data can lead to forming an opinion about
life quality, safety, public school quality or even employment opportunities. A
buyer will look at these aspects when it comes to deciding what is best for
his/her family and their future. The average buyer is willing to pay more for
the community aspects if they are pleasing him, instead of high-class home in the
down-falling neighborhoods.
Although you can find and buy foreclosures at
a lower rate than the average market, there is still the financing issue,
teaches Dean Graziosi. If you do not dispose of the fund necessary in buying,
updating a property for your own use or reselling (you have additional
marketing costs here), obtaining a financing from banks can be difficult,
especially when the house is in need of extended rehabilitation. Consulting a
contractor is the best way to avoid taking chances and ending up with your own
mortgage to pay.
Although foreclosures are a risky business,
they are also a huge opportunity for all investors trying to make it to the
real estate market. But planning in advance, having the right team on your side
and knowing your availability on taking a risk can be a success recipe, advices
the wealth guru. It has worked for him? Why shouldn’t it work for you?
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