Landlords: 5 Reasons to Examine Foreclosure Sales
 
Landlords: 5 Reasons to Examine Foreclosure Sales

If you own and rent just one piece of property you are consider a landlord. Property owners have the potential to make money and a lot of it, especially when the right cards are played. Are you making money now from your rental properties? Would you like to make more? You can with foreclosure short sales.

Short sales are an alternative to foreclosure. The decision to offer the property in the form of a short sale is made by both the borrower and the lender. Everyone needs to be in agreement because less than the outstanding mortgage amount is sought. For example, if a borrower owes $20,000 on a $45,000 home, the property may be listed for sale at $15,000. Some lenders try to get as much of their money as possible, while others want to unload the property as quickly as possible. This means there is always the potential to make money.

So, why should you, as a landlord, closely examine foreclosure short sales?

1 - Wide Range of Properties to Choose From

The poor economy has everyone in a pinch. With a high rate of unemployment and a troubling economy, many homeowners are unable to make their mortgage payments. Soon their debt is spinning out of control.

Right now, you may be running a profitable rental business, but not all landlords are. Due to non-paying tenants, empty units, and poor financial choices, some landlords are finding themselves in or nearing foreclosure.

This means you will find a wide range of properties for sale in the pre foreclosure stages, often available as short sale properties. All of these properties, including single-family homes, can be purchased, renovated, and rented.

2 - Get a Good Deal

As previously stated, short sales are alternatives to foreclosure. They involve selling a property for less than the outstanding mortgage amount due. Why do borrowers and lenders agree to short sales? Because it is much better than foreclosure. Borrowers do not suffer damaging consequences to their credit and most are able to avoid bankruptcy. Mortgage lenders get their money faster, even though they do accept a lower amount. They also avoid lengthy and costly foreclosure proceedings.

Since both mortgage lenders and borrowers are willing to accept less money for the home, there is the potential to get a good deal. By looking in the right places and bargaining with all lenders directly, you can get an amazing deal on any type of property.

Foreclosure short sales often result in a good deal, but always proceed with caution. Homes do depreciate in value in a poor market. Ensure the short sale price is significantly below the home's appraised value.

3 - Easy to Turn a Profit

Most buyers of foreclosure short sale properties are first time homeowners or investors. These investors buy a home and resell it. You do have this option, but use your experience as a landlord to make a profit. Consider the long-term aspect. By finding a low-priced short sale property, you can turn a profit in no time at all. For example, if you are able to purchase a 2-family home for $20,000 and rent out those two rental units for $800 a month each, the rental units pay for themselves in just 13 months. After that, you profit.

4 - Easy Way to Expand Rental Properties

If you are a successful landlord who is already making a profit or in good financial standing due to your rental properties, you may want more. Unfortunately, the poor real estate market makes that difficult. Many homeowners try to sell their home as soon as they notice a problem. They know that foreclosure may be months away. Unfortunately, most of these property owners have unrealistic expectations. They not only want to get out from their current mortgage, but make a profit. In most cases, that will not happen. You and all buyers know, the less you spend the more money you make.

For landlords, foreclosure short sales are an easy and affordable way to expand a rental property business.

5 - Bargaining Power

If you are like most Americans, you may need financing to purchase a short sale property. Since you are an established landlord, you are at an advantage. Not only should you have decent credit and adequate cash flow, but you have bargaining power. Not only approach lenders about buying a short sale property, but financing the mortgage directly through them! This is a win win situation. Sell yourself. You have experience buying properties, making repairs, finding quality tenants, and paying your bills on time. Remember, mortgage lenders want to avoid foreclosure proceedings at all costs. This leaves you with the power to bargain.

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Articles
Buying Short Sale Properties: The Importance of Preparation

Buying Short Sales: Dos and Do nots

Buyers: How to Convince a Mortgage Lender to Agree to a Foreclosure Short Sale

First Time Buyers: What to Expect with Short Sales

Foreclosure Short Sales: How They Get Started

First Time Homebuyers: 5 Reasons to Examine Short Sales

Homeowners Options to Avoid Foreclosure

How to Avoid Paying Too Much for a Short Sale Property

Buyers: How to Convince Borrowers to Opt for a Short Sale

How to Find and Buy Short Sale Homes

Landlords: 5 Reasons to Examine Foreclosure Sales

Making Money with Foreclosures: Your Options Reviewed

First Time Investors: 5 Reasons to Examine Short Sales

The Pros and Cons of Buying Foreclosure Short Sales

Pros and Cons of Buying Short Sales as First Homes

Short Sale Information: What You Need to Know as a Buyer

Foreclosure Short Sale Information: Frequently Asked Questions

Short Sales and Underwater Properties: What You Need to Know

Short Sales: Should You Let the Sellers Rent?

Short Sales versus Foreclosures: Which Should You Buy?

Foreclosure Short Sales: What They Are and How to Profit

Which Short Sales Are the Best to Profit From?

Who Benefits From Foreclosure Short Sales

Why Foreclosure Short Sales are Good for Homeowners

Why Lenders Agree to Short Sale Foreclosures

 

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This site is a common sense guide to Landlords: 5 Reasons to Examine Foreclosure Sales. In practical advice websites, like anything else in life, there are no guarantees of income made. Readers are cautioned to reply on their own judgment about their individual circumstances to act accordingly.

This site is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.

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