What is foreclosure investing?
Foreclosure investing involves the purchase of houses that are somewhere in the process of being confiscated by lenders due to the owner’s failure to meet mortgage obligations. The investor buys the house with the hope that it can be bought below market value as a result of the bank or lender seeking to move it quickly and recover funds. Foreclosure investing, despite the promises of late-night television infomercials, is not for the inexperienced. Most of these transactions are done “as-is” and with no warranty. Oftentimes, homes are sold at auction – a process that prevents prospective buyers from completing full property inspections. Therefore, there is no recourse for buyers who end up with houses that reveal dilapidation or hidden damages after the papers have been signed. Additionally, it is virtually impossible for foreclosure investors in a tight lending market to purchase properties with no money down. More often, an investor is required to put up a down payment of 10-20% to s
