Wow–there must really be some “good deals” out there in the foreclosure marketplace!!! I am constantly being asked to give advice on what is or isn’t a good deal. My answer is complex…you see, what is a good deal for some is not necesarily a good deal for others. Buying a $50,000 home for $25,000 is great–unless the home needs $25,000 in repairs–then it becomes a “wash”…On the otherhand, if you are a construction worker and can do the repairs yourself with minimum cash output–it’s a good deal!!! Clue yourself in to deals that appear to be too good to be true–you know the saying…the same holds true for house hunting. I hate to sound pessimistic but as far as the average investor is concerned–if it was that good of a deal the real estate agent would not be calling you about it–they would have snatched it up themslve!!! Let’s just say…”been there, done that”! One question posed to me this week that I do not often hear is: “What about buying a home by just taking over that payments, no closing costs or anything BUT the LOAN in higher that the appraised value of the property?” HMM–this was a tough question. On one hand there is a financial benefit to not having to cough up all the closing costs..on the other hand, the house is not worth what you are paying for it. The question later stated that the rental income more than covered the payment—that’s a plus… I finally had to come to the decision that this was simply up to the desires of the buyer–how does this improve the investors portfolio? Another thing I advised the buyer to do is make sure there is no secon mortgate on the property–I suspect tht he is taking over the first and second mortgage. Also, make double-darn sure there is an attorney handling the title exchange–even if he has to pay for it!!!
The bottom line–use you head and common sense when making investment property purchases–do not get caught up in the excitement of the process–stay level headed and learn to walk away from properties you do not have a definite handle on!!!