Foreclosures

Foreclosures: Are They a Good Buy?

Pacific Beach Real Estate, Mission Beach Real Estate, San Diego County Real Estate

One of the most misunderstood of all real estate issues is whether purchasing foreclosures is a smart investment. Many folks believe that current market conditions make it a perfect time to purchase one as their principal residence, a rental or to "fix and flip". Yet, truth be known, it is absolutely essential to understand that this is a niche market with many subtle, critical nuances which require considerable specialized knowledge and contacts. You'll need to understand how to crunch the numbers to determine whether a specific property is a viable purchase and most importantly, understand that acquiring foreclosures requires considerable patience, knowledge, hurdles and know upfront that you should forget about paying pennies on the dollar. I will try and explain. First, as a real estate professional, I believe, for good reason, that those of us in the profession are in the business to help people achieve the "American dream" of home-ownership. Without question, no one likes to see a homeowner stripped of that dream, whether because they've made bad choices, fallen on difficult times, or been victimized by predatory lending. Yet, the fact is that foreclosures do happen and today, they're happening at an increasing pace. Adjustable-rate mortgages which originated just a couple of years ago are adjusting and at the same time, sales prices and values have largely flattened, eliminating the gains in appreciation that many homeowners had counted on. So as more foreclosure properties come on the market, it's not surprising that interest has grown among buyer-investors who often believe that they can purchase a home at a deep discount, make a few necessary improvements, then either sell the property at a profit or use it for rental income. In remote cases, this may be possible, however, it would be grossly inaccurate to characterize this as easy money. Investing in foreclosure properties requires a whole body of knowledge and skills and foreclosure processes and procedures vary greatly from state to state, or even from county to county, making it even more challenging to learn the ropes. Here are the "basics" which explains in detail the foreclosure process in California.

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