As many of you will be aware, investors have been purchasing foreclosed properties in places like Orlando, Florida since early 2008.
They have been doing this because it is an excellent way of purchasing an undervalued buy to let asset.
However it can be a frustrating experience as well, as clients are often bidding against several people for the same property, and once an offer is made, you usually have to wait 2-3 weeks to receive an answer.
If the bid was unsuccessful we need to start again.
Once a successful bid is accepted and processed, the management company process starts, with the lucky landlords finding new tenants within 4-6 weeks.
If a person was unlucky enough to receive "your bid was not successful" messages three times, he could easily have wasted 3 months trying to purchase a foreclosed property with absolutely nothing to show for it! Even if you were lucky enough to have a bid accepted and you (or your agent) managed to navigate your way though the extremely slow and bureaucratic title companies - you might not get a tenant very quickly.
I know of several people who had to wait more than 3 months for this - that's three months paying HOA and Real Estate taxes without any income to show for it.
After I'd spent many months purchasing and helping people purchase property this way, it became evident that there was a much better way of doing this, both an agents and a buyers point of view.
As has happened in Ireland & the UK, when the credit crunch was causing misery for local Orlando developers quite a few decided to try and ride out the storm by furnishing and renting out the remaining units themselves while waiting for the market to turn.
Makes sense right? But what if you can find a developer who owned and rented high quality units and was about to be foreclosed by a bank? Let's say you find one who needs to raise $5 million in 30 days or the bank will seize his assets.
Would he be willing to sell 100 of his properties to investors with tenants in place at a foreclosed price level (say $50,000) in order to avoid the excruciating foreclosure process? The short answer is yes, he certainly will! This method has all of the benefits of a foreclosed property (highly discounted price, v high rental yield) with none of the headaches (bidding process, red tape, finding tenants).
If you can tailor your search for these types of tenanted units, then everything becomes a whole lot quicker - and much more profitable.
They have been doing this because it is an excellent way of purchasing an undervalued buy to let asset.
However it can be a frustrating experience as well, as clients are often bidding against several people for the same property, and once an offer is made, you usually have to wait 2-3 weeks to receive an answer.
If the bid was unsuccessful we need to start again.
Once a successful bid is accepted and processed, the management company process starts, with the lucky landlords finding new tenants within 4-6 weeks.
If a person was unlucky enough to receive "your bid was not successful" messages three times, he could easily have wasted 3 months trying to purchase a foreclosed property with absolutely nothing to show for it! Even if you were lucky enough to have a bid accepted and you (or your agent) managed to navigate your way though the extremely slow and bureaucratic title companies - you might not get a tenant very quickly.
I know of several people who had to wait more than 3 months for this - that's three months paying HOA and Real Estate taxes without any income to show for it.
After I'd spent many months purchasing and helping people purchase property this way, it became evident that there was a much better way of doing this, both an agents and a buyers point of view.
As has happened in Ireland & the UK, when the credit crunch was causing misery for local Orlando developers quite a few decided to try and ride out the storm by furnishing and renting out the remaining units themselves while waiting for the market to turn.
Makes sense right? But what if you can find a developer who owned and rented high quality units and was about to be foreclosed by a bank? Let's say you find one who needs to raise $5 million in 30 days or the bank will seize his assets.
Would he be willing to sell 100 of his properties to investors with tenants in place at a foreclosed price level (say $50,000) in order to avoid the excruciating foreclosure process? The short answer is yes, he certainly will! This method has all of the benefits of a foreclosed property (highly discounted price, v high rental yield) with none of the headaches (bidding process, red tape, finding tenants).
If you can tailor your search for these types of tenanted units, then everything becomes a whole lot quicker - and much more profitable.
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