Utilize The Lender's Misfortune To Increase Your Charlotte Investment Property Holdings

By Samantha Preston

In these days and times, there are many instances of people taking loans to buy property and being unable to pay back the mortgage. This is where the lenders are left with properties that they have to re-possess from the defaulting buyers and then sell it through a loss mitigation department. These repossessed properties are known as REO properties and cannot be auctioned openly on account of which these are sold at rates much lower than market rates. Given the vast selection and choice available, investors can have a gala time looking at acquiring such Charlotte investment property.

REO properties are by their very definition lacking in equity. Otherwise, they would have been sold at the auction. These properties are definitely not for everyone. There are risks associated with purchasing a property "as-is". REO properties are homes which have been legally repossessed by lenders after a homeowner has failed to pay a mortgage. Since lenders simply wish to recoup the money lost on the loan and do not want to pay the management costs on a Charlotte investment property, they are often willing to price these REO homes below market value.

REO properties are also foreclosed properties, but the different part about them is that they could not be sold at an auction. These properties were sent to the bank and they are not carrying a mortgage anymore. REO properties are sticky for lack of disclosure purposes and liability releases more than anything else. You will be informed that the lender is basically released from all liability because they have no clue about the home. REO properties are usually listed for sale with local real estate agents. Given the current state of the economy, lenders are selling their REO properties for a greatly reduced price.

REO properties are a financial burden to banks. All of the upkeep is their responsibility. They are usually sold as is, so a thorough inspection is necessary to estimate the rehabilitation costs. Software programs exist that allow you to print inspection forms and work from a set of standard rehab specifications to help you accurately estimate rehab costs. REO properties are a drain. Each day that a property is vacant, it costs money to maintain.

Lenders that have an REO property would like to sell it off as soon as they can. It is true that they would not like to hold on to it for long which is why they enlist the services of local estate agents to sell it off. They are also quite willing to hammer out some structured deals for those buyers who want to buy such properties in bulk.

Those who want to look at acquiring an REO property would be well advised to get to know some of the essentials and basic principles in such deals. If the Charlotte investment property is well priced and reasonable there could be a lot of potential buyers, with some of these being institutional buyers too, as a buyer you can look for guaranteed or direct loans. Direct loans can be had as they are funded under the rural housing plan of the government. In case of auctions, one cannot get too much of a chance to inspect properties, which means that REO properties are quite suitable. On the other hand, buying at an auction enables the investor to circumvent the hassles of dealing with lenders. - 23218

About the Author:

Samantha Preston is a real estate investor who enjoys Charlotte rental property passive income. Her specialty is real estate in the South.