Buying Las Vegas Foreclosures and REO Properties
By Mei Loh-Becker (copyright)
The number of Las Vegas Foreclosures and REO is among the highest in the nation. We are seeing once again multiple offers situations with offers above listed price. Naturally this enticed many investors back to the local market taking advantage of “buying low” phenomenon, while proactive home buyers are joining in the pursuits of finding a “steal” while its still a buyer’s market.
Why Buy a Foreclosed Home?
Although foreclosures are being seen as the best option in real estate investing as many foreclosures can be bought at prices way below market value, This is NOT always the case. Some foreclosure properties are sold at or around market value while others require expansive repairs that leave little room for “profit”.
Currently, Las Vegas Foreclosures are getting multiple offers and over bidding., However there are plenty of great buys out there provided you have access to finding these properties as soon as they hit the market, know how to negotiate with the lister (the bank) and understand how to navigate through the technicalities of the escrow and title issues of a foreclosed property.
When it comes to investing in foreclosure homes, KNOWLEDGE is key factor. Some real estate investments may be better than others. You need to understand the market and demands for the area and type of homes you are investing in. Don't be driven by price point - a smart investor know that real estate is about location, location, location! While you can buy a a home for $50,000 in a certain part of town doesnt guarantee you a renter nor a return of investment when it comes time to sell it because of its location. So all this needs to be factored it. You need to know what your target market is looking for and where you find them.
Like all investments, there are risks involved in real estate investment. Equipped yourself with a thoroughly thought out financial plan; take a good look at your cash flow for the next few years. Include Plan A and Plan B. And lastly, you should never look at this as a Get-Rich-Quick program!
Is This A Good Time to Invest in Las Vegas Foreclosure Properties?
There have been twice as many foreclosures this year as last, lenders have been unloading these properties at amazing prices. . The seasoned residential property investors are bidding their way to earn a piece of good deal while they are hot and available.
In this market, Las Vegas Foreclosed properties bode well as “long term hold” If you have that mindset, you are off to a good start.
Being landlords comes with responsibility, if you don’t mind that and have the cash and credit available to you - this is the PERFECT time to buy. Remember you are in for the long term appreciation and gain. Also, with the tightening of mortgage lending , many can no longer afford to own will rent their home. So as a landlord, this will only add to your benefit.
What You Need Before You HUNT for a Las Vegas Foreclosure
- Knowing your Goal: Foreclosure investing can make you money if you planned it right and understand the process and sacrifice involved. In a traditional foreclosure investing, the investor buy a foreclosed property which may be a distressed property at a good price, invest some money, time and some elbow grease and re-list it for a profit. The investor may also rent or lease it depending on their goal, feasibility and financial position.
- Get Pre-Approved: This is the first and most important step. You will find out exactly what you’re qualified for at today’s rates and terms as well you can anticipate your future cash flow, whether you are renting it or living in it. Remember, at today’s foreclosure market, your offer will not be submitted/reviewed without a pre-approval letter. So you will be wasting time trying to submit an offer anyway. Also note that many banks require that buyers submit offers with an approval letter from their designated lenders although buyers are not required to close with these lenders. But without approval letters from their designated lenders your offers will not be submitted to the banks either. So get it or skip these properties, dont waste time.
- Foreclosure Hunting: At this point, we would have determined based on our price range, our area of search, type of homes, anticipated cash flow and how much room you have to negotiate. I will provide you with an extensive list of real estate foreclosures. You will short list some for previews.
- Making an Offer: Remember that we are in multiple offer situations, you may end up writing a few offers or even re-submitting your original offers. Knowing the market and how the lender works will help make this step easier or you may see yourself still out there writing offers a year later.
When you are ready to explore this investment, give me a call. I offer a FREE consultation, and together we will determine if real estate investment is feasible for you. As disappointing as it may be, you may realize following our consultation, being a landlord is not your “thing” or it may be that financially speaking , this is just not a feasible time for you.
What You Need to Submit an Offer?
Copy of earnest money deposit (can be a personal check or certified funds)
Proof of funds (bank statements for cash purchase) or if financed, a approval letter from a major lending instituition (BofA, WF, Chase, etc)
Also note -- some listings will require approval from their approved lenders only. i.e Bank of America assets will always require BoA approval letter to be submitted with the offer. Although the buyers are not required to close with their lender, but without it, the offer will not be submitted for review.
It may be tiring and frustrating for buyers to buy REO properties in this market because of all the guidelines. Ultimately you as the buyers will choose which properties to make offers on, so if you are not going to get approved with speficied lenders, then we can skip those properties and focus on that you can submit an offer with your approval letter.
In the investor's price ranges, there are a lot of HUD homes, Fannie Mae and Freddie Mac's assets/listings on the market. Under their regulations, properties are NOT available to investors' offers until 30days of listing
had lapsed. There will be multiple paperwork for buyers to certify that this property is purchased to be occupied by owners. Mortgage fraud will come in play here.
So for our purpose of investment, these properties will be skipped as well.
My Goal is to help my clients find the right properties and investments at their terms. I would fail my job if my clients find themselves in foreclosures for reasons we could have anticipated. While we’re not always able to plan for everything, it is important to have a back up plan you can fall back on. Therefore, our initial consultation time worthy.
|
