Government foreclosed homes are much the same as bank or other lender foreclosed homes. There are government institutions that provide mortgage loans including the HUD, the VA, The Department of Forestry, Naval Services, Army and many, many others. If they have provided a mortgage loan and the home owner has defaulted on the mortgage repayments for a certain amount of time, they, like other financial institutions have to commence foreclosure procedures on the mortgage. Other government foreclosed homes might have been brought into the inventory because of tax liens, but one way or another they are all government foreclosed homes.Because of the foreclosure crisis being experienced at present n the US, it is not only banks which are seeing a huge amount of these homes come into their inventories. Government foreclosed homes are many and available cheaply, generally at auction sales held a couple of times a year. These sales are pretty widely advertised and anyone is allowed to attend them provided they can come up with the cash if they make and win a bid. It is vital to obtain pre-finance before attending an auction for government foreclosed homes.Use of a good listing service will give you access to government foreclosed homes, and as there are so many to choose from, any wise investor or home buyer should be able to find just what they are looking for in a property. Government foreclosed homes are available at a good price and many home buyers are looking for just that.It is a sensible theory that if cheap property is available in government foreclosed homes, buyers should take advantage of this. No-one wants to find themselves on the opposite side of a foreclosure, but with a good value for money property that offers low mortgage repayments, who could possibly go wrong?With the burgeoning foreclosure market in real estate, we have seen the prices of traditional real estate drop tremendously. This means that many homeowners are now living in homes they bought as much as two years ago that have no equity n them and very little chance of re-sale until the market changes. Two years ago houses on the open market were very overpriced, and as a home owner has to sell a house what at least what he owes on his mortgage loan, the open market is not a good place to be buying real estate. At present we are experiencing a fantastic buyers market and anyone looking to sell a property in the open market will really struggle to get their price.The foreclosure Markey has become every more popular with new home buyers, families individuals and investors, and why not? It makes sense to buy a home for a fraction of its potential value. Government foreclosed homes are a good source for finding this. It is not that difficult to find property in this market that offers substantial savings or pure investment value.
During the past decade, many people have jumped into residential real estate investing. This was never so true as during the recent real estate boom. People read all the “get rich quick” schemes that litter the book shelves of libraries and book stores — use other people’s money, use no money of your own, and make millions! A lot of people did make great sums of money during the most recent boom; but now those, who did not get out before the market cooled, are seeing those investments in foreclosure due to their inability to make the mortgage payments.Just because the real estate market isn’t over the top, as in the past few years, does not mean you no longer can make money in residential real estate. The difference between now (post-boom) and during the market boom is that the “get rich quick” schemes will not work.Do You Have What It Takes?Investing in real estate is not for the faint hearted, the non-risk takers. It is for investors who are in it for the long haul, who can easily sit on their investment (if need be) until the market shifts in their favor. It also is for those who truly enjoy this type of investment. They are the ones who are the most successful in real estate investing.You must be willing to invest time — upfront and before each potential investment. If you do not take the time to research the properties and your target market, you probably will not be very successful. You also must gather knowledge on how to make a real estate deal that works in your favor. That requires educating yourself to understand the jargon and game rules. Today, it takes a careful, methodical approach to residential real estate investing, especially when acquiring your first property.Besides needing time and money, being a risk taker, and being willing to commit to a long-term investment, if needed, there are five additional factors you must consider each time before you make an investment in residential real estate.Supply and Demand — Where Is the Current Market?The economics of supply and demand is what makes the long-term investors successful in residential real estate. They are willing to weather the ups and downs of the real estate market, waiting for an advantageous market to sell their property.Supply and demand is influenced by many economic factors, which in turn affects the residential real estate market. Well-located residential real estate will endure fluctuations in the market and continue to appreciate in value. Knowing your market means knowing when to buy or not to buy, which deals will work when, and when to sit on an investment or sell it.Your CreativityAnother factor to consider is your own creativity in managing your investments. Residential real estate is one type of investment that allows for a lot of creativity:o You may invest for the long term, renting the property to continue making a profit while waiting to sell at a more advantageous time. You can purchase a home to fix up and resell immediately for a profit.o There are many financing options available for residential real estate, allowing for even more creativity. You also can invest on your own, with a group of partners, with a corporation, or even with a Real Estate Investment Trust (REIT — a mutual fund with real property assets or mortgage securities).o There is an abundant variety of residential real estate types in which to invest — single-family homes, townhouses, condominiums, and duplexes.The more creative you are in creating and managing your real estate investments, the more profitable and successful you will be.Other People’s MoneyA third factor is knowing how you can use other people’s money to your advantage without landing in foreclosure, as so many people now are who subscribed to the “get rich quick” schemes during the boom.You can begin with only a few thousand dollars, using other people’s money to underwrite the remaining mortgage. You must know all the different ways available to finance your investment. This goes back to taking the time to educate yourself, before you begin investing, and creatively making the best use of financing.Other People’s TimeWhether you are fixing up real estate to sell or renting it, it will take time, effort and management. If you already have a full-time job and a family, you probably cannot do it all yourself, and I doubt you wish to be woke up at 2 a.m. by a renter with a plugged toilet.Using contractors to fix up the property or experienced property managers to handle your rental real estate makes for less profit in your pocket on your individual investment properties. However, it frees up your time to invest in more properties, making your overall profits much higher.Your Tax AdvantageResidential real estate investing is quite unique. It offers you tax write-offs not available in other types of investments. There are many deductions available to you — deducting the mortgage interest or refinancing without being taxed are just two examples. There are many benefits to real estate investing that reduce your tax liability and increase your profits.If you believe residential real estate investing is for you, begin by learning more about it. There are thousands of books and resources on the topic. Stay away from anything that sounds too good to be true. It probably is, especially in today’s real estate market.