The idea of purchasing a home for substantially less than anticipated is something we can all agree upon. As the economy stagnates into a state of disrepair, we are all wondering when that much-needed break will come. Well, while some of us will have to wait until the recession’s suffocating grasp eases up, others can wine and dine Lady Luck today.
This past July marked the 17th consecutive month where foreclosures have exceeded 300,000 nationally. Never before have we seen such a network of real estate property available for not only significantly cheaper but accompanied by the lowest interest rates in 39 years. Banks are increasingly desperate to sell properties in jeopardy, as they are trepidatious about the welfare of their loans. What’s more is that the density of competition within the current market is almost non-existent. The majority of people interested in owning a home will not forego the troubles of negotiating through a pre-foreclosure, short sale or real estate owned (REO) offer. This opens up an incredible window of opportunity to invest in a property and see a more-than-generous turnout to fruition.
As an expert in property investment, I highly recommend the idea of buying a distressed home that is soon to be fresh on the market for several reasons. Consider purchasing a distressed property for a shadow of its previous price and, either, renting out your current home or simply switching your primary residence on the tax rolls. Through a short sale or REO purchased piece of realty, you could be looking at earning a cool $500,000 – tax free – in as little as two years.
With that being said, many transactions carry their share of risks and one must tread carefully before going ahead with such a lofty investment. As a recognized realtor within the Twin Cities’ West Metro, it is my duty and passion to ensure you make the best possible buy. Here is some personal insight I’ve gathered, based upon knowledge from past dealings and experiences:
Presenting the offer of a short sale, before a house’s impending foreclosure, generally carries the highest rate of success. Making an offer to purchase a property for less than the mortgage loan is an amicable way to score the best price and lessen the blow on the seller’s credit score.
A good place to start is researching the original sale price of the property to the owners. Troubled loan departments will typically take an offer equal to around 80% of the loan without a fight. If you are looking at a piece of property where the homeowners paid top dollar and received a 100% loan, you may have to offer anywhere between 20-30% of the mortgage to come out with a good deal. No matter the circumstances, always be sure to start with the lowest reasonable proposal -- making them come back to you with a counteroffer.
Next, get permission from the current borrowers to contact the bank’s short sale department. Find out the property’s exact foreclosure date, and with this knowledge in hand, issue a timely offer to the short sale department. Since this department does not communicate with the foreclosure people, odds are your short sale proposition will be accepted.
While these results aren’t typical and certainly not easy, turning a profit is more than plausible. The thought of earning $500,000 tax-free should be more than enough incentive to give it your best shot. However, in order to position yourself in the way of these earnings, you would need to buy something nicer than a $150,000 house on a suburban lot. For instance, say you purchase a house with the last transaction price being 700,000 and a $540,000 mortgage. If you purchase that for 35% off, you pay $351,000. When inflation skyrockets, sell it for $910,000, gain half a million dollars and go home after two years, tax-free. Food for thought.
[Note: This figure is derived from a husband-and-wife exclusion for the tax on the capital gain of a primary residence that has been occupied two of the five prior years.]
With so options out there, I understand how overwhelming the process of buying, sell or leasing a property can be. As your number one realtor in the Twin Cities’ West Metro, I am here to take the complexities out of any transaction. Let me handle the banks, lenders, borrowers and paperwork as you sit back and reap the benefits. With over ten years of experience, I’ve seen it all before.
So call me, Travis Senenfelder, today to discuss short sales, pre-foreclosure, property investment and anything under the real estate sun. I can be reached at 651-216-9466 or through my email: travis@buysellleasemn.com.
All the best,
Travis Senenfelder,
President, BSL Real Estate
440 2nd St.
Excelsior, MN 55331
For information on investment property: http://www.buysellleasemn.com/sell/investment-property/
For information regarding first-time homebuyers: http://www.buysellleasemn.com/sell/first-time-buyers/
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