We do not have to delve too deep to figure out that a good investment in real estate is nothing short of investing in a gold mine. Being a straightforward buy – hold – sell investment requiring only a good judgment and some time to bear fruit, real estate is the most delicious apple of the whole basket. But Real estate is also not without its own worms to be looked out for.
Real estate investing gets all the more tougher with the fear of rapid decline in prices always a constant threat. A high price entry followed by a potential chance of a burst is a test of character for even the most seasoned investors. But real estate will build up pace again, simply because the basic rule of supply and demand makes it such a lucrative investment that no investor would stay away from it.
So the big question is How to cash on this trend and achieve superior returns? With a number of properties depleting in equity and becoming deadweights for their owners who feel that foreclosure is a more profitable option, the straightforward real estate market is steadily loosing steam. Asset prices have been falling and more and more properties are being foreclosed.
- Foreclosure
Foreclosures occur when property owners raise loans against the equitable value of the property. Increase in the value triggers more equity loans. When due to some occurrence or event the equity value drops, and the owners are in a cash crunch rendering them unable to pay – off interest and principal payments. Backed into a corner, owners are left with no choice but to default on loans and hence lenders foreclose property.
- Foreclosure Insights
Jeff Adams shares his insight on the foreclosure scenario which reveals the reasons as to why investing in foreclosure is a lucrative investment option. Lenders with foreclosed real estate assets have no business in owning property and are more interested in covering up on their defaulted loans. This propels foreclosed properties to be sold off for a hefty discount of their real prices in exchange for upfront cash.
A successful investor is always on the lookout for an opportunity to beat the trends and capitalize on the excessive returns. With property almost hitting a low, well researched and thoughtful investing into the real estate asset class could yield just rewards. Real estate being a highly ‘in demand’ asset by nature, it is bound to find some takers sooner or later. A timely investment now could land you with extravagant returns in the growth phase.
- Types of foreclosure investments
Investors have a large number of options to choose from while considering real estate investment through foreclosure. Some of the options are
- Auctions for getting highly discounted properties for upfront cash
- Pre – foreclosure is where the owner is directly dealing with the owner during pre – foreclosure stages to get a mutually beneficial fair price without any competition. This also allows for an in depth due diligence.
- Short Selling is where an investor directly contacts the bank who owns the property and negotiates a deal to remove the bank of a non – core asset while gaining a lucrative investment opportunity at run – of – the – mill prices.
Hence for any good investor to achieve success in the future, exposure to real estate is a good choice and what better time to ‘buy in’ than when an asset is under-priced.
