Most of the investors buy properties, fix them by making necessary repairs and then sell them at significantly high rates. In such cases, the usual ROI is 20-30%. However, if you are thinking to flip the properties, you must pay attention to the fixings you are making as potential buyers investigate about it. In contrast, foreclosures are not considered as a good option for those who are looking for a home where they can reside. It is because of the reason that foreclosures are sold “as is”. The property may need significant repairs and can increase the expenses of the buyer.
Furthermore, it also depends on the payment type if a foreclosure property is going to be a good option for you or not. If you are willing to do cash payment, it will be a good investment but if you are thinking to get a mortgage, then you can face potential difficulties. So, you need to decide why you are going to buy the property and how you are going to pay for it; only then you should proceed further.
Well, before you begin with the purchase process, let us tell you about the different types of foreclosures:
A pre-foreclosure is a property that is owned by the homeowner who defaulted on his mortgage and have received the notice for foreclosure. It is the time period when most of the homeowners are motivated towards selling their homes as they don't want to face the foreclosure like situation. It is also known as short sale and is considered as the best way to stop foreclosure in Houston.
Foreclosure properties sold at auction
The properties for which the homeowners remain unable to stop foreclosure are sold through the foreclosure auction. The process begins by offering an opening bid amount that is the sum of the loan balance, accrued interest and other additional expenses. The potential buyers can buy the property by participating in the bid.
Foreclosures owned by the lender
When a property is not sold at an auction, it is owned by the lender/bank. In this case, the main goal of the lender is to sell it as fast as possible. It's up to him whether he fixes the property or sell it “as is”.
"Now, being aware of all the facts about foreclosure property, you must have understood if it would be a good deal for your or not. In the case, you face any difficulty in the purchase of a foreclosure property, you can seek the help from an experienced foreclosure agent in Houston. You can easily find a one as there are many."