Yes, it is true that there are good deals on foreclosures. You can check for yourself by registering on for Multiple Listing Search on my Website: www.MaryCondon.com Let's take an example, check out the town of "Revere"...or "Dorchester"...or "East Boston". Read the property description....it will tell you if it is a foreclosure. There are many.
But here's the rub. You are competing with pools of investors with cash. Additionally, they have access to Realtors tied to REO: Real Estate Owned...historically by lenders. Recently, I have seen an interesting trend...Hedge Funds are buying Bulk Notes from lenders who want those off their books.
So now what???
For starters, contact me: 508.479.9833 or email @ marysold@gmail.com and I will put you in direct contact with a REO Agent.
Next is understanding the process. I'll share the steps I take for my investors.........which are similar to what I do for any buyer.
Investor client of mine is looking for deals on foreclosures in the multiple family market. Preferably 3 families.
FIRST I conduct a through Financial Analysis Summary...using a formula determine if a property is even worth researching. The formula is calculating:
NOI = Net operating Income ; knowing your rents, vacancy ratios and expenses
Cash Flow: you will need to calculate your investment basis
ROI = Rate of Return
Capitalization (Cap) Rate
COC = Cash on Cash Return
TROI = Total Return on Investment....which includes calculating: Tax consequences; Property Appreciation; Equity Accrued
If it passes the formula test...I schedule to preview the property. My preview will have me evaluating key aspects of the property that would be costly to the investor to repair and/or replace: heating, plumbing, structural, environmental etc. I also have formula's for each of those areas learned first hand from builders, plumbers, HVAC, electricians etc.
If that passes muster, I head to town hall to review all the files in each department regarding this property. What am I searching for: mechanics liens; tax liens; permits pulled and signed off from any "work" done on the house; zoning; property lines etc.
THEN, I present this property to the investor. Mind you, I only do this work for those investors and buyers who are "clients"of mine contractually. This expertise I have gained is a valuable commodity.
A review of my findings and the investor says go for it. Either my investor has cash or they are highly leveraged or combo 20% cash and excellent credit with a mortgage in place "property to be determined:.
Every lender and hedge fund has different requirements, which must be followed exactly. Lenders typically take longer for decisions. I recently represented my client in the purchase of a hedge fund owned 3 family. FAST!!! Offer...5 days for "due diligence"....P & S....10 days for mortgage commitment.....close asap.
Take away: MUST be able to get the mortgage within 10 days.....meaning - find a lender who has you approved AND can get an appraisal turned around within the time period.
IF you do not get the mortgage within the time frame there is usually a penalty for each day you go past the mortgage commitment date - and it can be steep: $ 100/day. Furthermore, after this point, if you back out your earnest P & S money, 5% of the purchase price, is kept by the hedge fund - you loose it.
How can you get "leveraged"? IF you have another property which has considerable, unencumbered, equity get an "equity line of credit" on that property. This allows you to simply write a check against the equity of your property to buy the investment property.
But You MUST know what you are doing!!! Please be working with a Realtor who can do this. I would love to talk with you.
Investing is an excellent way to build wealth......like anything else worth doing well ....be prepared!
I'm here to serve YOU...It's MY pleasure!
Sincerely,
Mary Condon
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