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Magic Words For Real Estate Investors: HUD Foreclosure
If you know your market area like the back of your hand, chances are that other real estate investors do, too. You won't be the only one into real estate foreclosure investing in a desirable market area. But you may be able to get a hold of a decent property through a Housing and Urban Development (HUD) foreclosure. Keep in mind that with a HUD foreclosure, you will have to invest money for repairs. If you can cover that, then there's no reason to shy away from a HUD foreclosure property.
Whenever HUD buys a home, it becomes a matter of public knowledge. You need to keep an eye on HUD's website at hud.gov in order to find out where there latest purchases are. You also need to keep checking the websites of local companies or brokers that do business with HUD.
You want to keep an eye out for the homes in your desired market area that you know are going to be foreclosed upon. If you can wait, chances are HUD will buy the home. They often take care of some closing or commission costs for you. You can often bid electronically on HUD foreclosures.
Just like with anything else in real estate investing, there are advantages and disadvantages with HUD foreclosures. HUD is not interested in getting mansions in the most desirable locations in the nation. Their homes tend to always be worth less than $400,000. And, as mentioned above, the home will often be in need of some repair.
Another disadvantage in the eyes of some real estate investors is that the biding process is a little more complicated than for going for other properties. First off, you are not allowed to bid for the first ten days of a HUD foreclosure. This is to give the people who are still living in the house one last ditch chance of being able to get out of foreclosure.
Which leads to another disadvantage of investing in HUD foreclosures. Having your home taken away from you is one of the most traumatic experiences a person in America can go through. People can do some really desperate and sick things in order to purposefully lower the property value and make your life heck. These include destroying the property, leaving pets to die in the property or even committing suicide in the property. You do need to realize that if you find people or pet bodies in your new property, you must contact the police so they can prosecute.