Property foreclosure is an unfortunate yet common occurrence that plagues many homeowners in the country. According to Attom Data, around 270,22 properties are foreclosed each year. Despite their tragic background, foreclosures present real estate investors with unique opportunities.
This blog will discuss how investors can identify lucrative deals on foreclosure properties and share some of our top tips for buying foreclosed homes in the Blacksburg area.
Understanding Foreclosures in Blacksburg
Property foreclosures refer to the legal process in which a mortgage lender tries to recover the amount of money owed on a defaulted loan. The lender accomplishes this by taking ownership of the property in question and selling it.
A defaulted loan gets triggered when a borrower misses a certain number of monthly payments. Failing to meet other loan terms can also result in a default. The number of days varies from state to state. Borrowers need to be over 120 days past due to be considered delinquent.
The Benefits of Investing in Foreclosures
Many people explore purchasing foreclosed properties when seeking to expand their real estate investment portfolio. Some of the advantages of pursuing distressed properties include:
- Motivated sellers mean a lower sale price
- Properties priced below market value
- Build equity faster for a better investment
One thing to keep in mind when pursuing foreclosure properties is that they're sold in as-is condition. You might not be able to schedule a home inspection before closing on the property. While the initial investment may be lower than a traditional property, you might have to set money aside for renovations.
Investment Strategies for Foreclosed Properties
Investing in any property takes proper research and careful planning. However, even more consideration should go into purchasing a foreclosure property.
Research the Foreclosure Process
Take the time to learn everything you can about property foreclosures. This includes educating yourself on the different stages, such as:
- Pre-foreclosure
- Property auctions
- Bank-owned properties
Determine Your Goals
Are you interested in flipping homes for a quick profit? Is your goal to purchase the properties and hold them as rentals? Figuring out your goals will influence your investment and search decisions.
Secure Your Financing
Getting pre-approved for a mortgage and exploring your financing options will make you a more attractive buyer. This will also ensure you can move quickly on a property once you find one.
Find Suitable Properties
You should work with an experienced real estate agent when looking at foreclosure properties. Agents can give you access to some of the following things:
- Valuable market insights
- Guidance
- Exclusive listings
They'll also compare the properties you're interested in to others in the area. This will allow you to see if the foreclosed property is a good deal. You can also use this information to evaluate how much money you should offer.
Partner With an Experienced Real Estate Firm in Blacksburg
Investing in foreclosures is a great way to grow your investment portfolio at a lower rate than other properties. Doing your research and creating a team of experienced individuals will set you up for success. Take your time to learn as much as you can about the property you're interested in before you make an offer.
The property management experts at PMI Commonwealth are here to guide you through your investment property journey. We have compiled the best investment property listings available in the Blacksburg area on our website, ensuring you find the best options possible. Contact us to schedule a consultation.
