As the property investment game gets more challenging, the only sensible way to add to your portfolio in this environment is to buy properties significantly below market value. Do this properly, and you’ll find you don’t need to put in any money of your own.
The mortgage companies want you to find 15% of the purchase price every time you buy! Where on Earth do they think you have all these 15%’s stashed – under the floorboards?
This article will take you into the world of the below market value (BMV) investor, and show you how you can free yourself forever from the shackles of the 15% deposit.
You must first understand that it is perfectly possible to buy BMV properties, no matter which area of the UK you live in, and almost regardless of your own financial circumstances. There are below market value properties for sale all over the UK, all the time. The challenge is tracking them down and adding them to your portfolio.
There are two main ways to find BMV properties for sale in the UK. One is through auctions, and the other is to track down motivated sellers yourself. In this article, I’ll be concentrating on auctions – we’ll leave the tracking down to another time!
People and organisations choose to sell through a property auction for two main reasons – speed and certainty. It generally takes no more than eight weeks at the most, and sometimes considerably less, to go from the decision to sell a property to the auctioneer taking bids for it in the auction room.
If the vendor sets a reserve – the minimum price they’re happy to accept – and the reserve is met or exceeded on the day, then the property is sold the moment the auctioneers gavel falls, and the deal will be completed within 28 days.
No pulling out. No quibbling. No question.
As a BMV investor, you can get the auction catalogues from auction houses in your area, research potential properties, do your due diligence, turn up at the auctions, bid on your target properties, and then go ahead and complete on the deal within 28 days (or risk severe financial penalties).
All of this takes time, money, resources, a certain amount of skill and, if you’re out-bid on the day, it’s all for nothing and you have to start again. And let’s be clear – not every property sold at auction sells below market value – far from it!
The other way to do it is to use what might be called “vulture tactics”.
Rather than spend all that time and energy scoping out possible BMV properties only to be out-bid by ‘amateurs’ who don’t understand the true worth of a property, or who want it at more or less any cost, you just sit back and relax. Then, when the auction is over and the bidders have all gone home, you take a leisurely look at whatever lots are left unsold.
Just look at the advantages of this strategy…
* You only spend time and money researching the properties that are definitely still available
* You know the asking price without having to bid
* The competition for properties is significantly less
* The 28-days-to-complete rule usually disappears
There are three ways you can get hold of unsold auction lot details.
1. Direct From the Auction Houses
You may have a couple of auction houses in your area, and you could always ask them to send you details of unsold lots as soon as a sale is over. The larger firms now publish them on their website, too.
2. From the EI Group
David Sandeman does a great job at the EI Group. They collate all the property auction data from around the country, and their records go back as far as 1991. However, a subscription costs around £500 a year, so you need to be pretty committed to make that sort of investment worthwhile.
3. Subscribe to the Property Bargains Bulletin
Leo Summers has produced the Property Bargains Bulletin since 2005, and what he does is unique. The Bulletin is emailed out to subscribers twice a month, and each issue covers 8-12 bargain property opportunities. You get a photo of the property, the full address, contact details for the selling agent, the price of the property against it’s true market value, details of any income it’s bringing in, and a full page of analysis as to why the property is a bargain, some ideas as to what to do with it, and any potential pitfalls identified.
All this for less than a pub meal a month!
Now you know exactly how to find BMV properties at auction, and particularly amongst unsold auction lots. In a subsequent article, we’ll look at how to track down motivated individuals who will happily sell you their property at below market value prices.
Subscribe to the Property Bargains Bulletin and receive 16 – 24 BMV property deals every month. You get all the information and analysis you need to simply pick up the phone and buy direct from the agent. No finders’ fees. Just fantastic below market value properties!
Article Source: http://EzineArticles.com/?expert=Rob_Best
Buying a house below market value is a good way to get more profits as a real estate investor. One way you can find property at below market value is a foreclosure auction. Real estate goes into foreclosure when an owner of that real estate does not pay their mortgage on time. When real estate payments are not up to date it is a distress property. Nothing physically can be wrong with the house and it can be classified as a distress property. If the payments are not up to date that is enough to make a house a distress property. When a house is in distress status the owner is given a certain amount of time to bring the payments up to date. If the property owner does not bring the house up to date the bank that holds the mortgage can foreclose on the property.
When the bank takes control of a house that is when a distress property is classified as a foreclosed property. When the bank forecloses on a house, the bank will try to sell the house in a foreclosure auction. In a foreclosure auction the person with the highest bid will take control of the house from the bank. If the price is too low the bank will not sell the house. Some foreclosure auctions start at the price the bank is willing to sell the house for. Finding these auctions can take some work. Some places you can find foreclosure auctions are the newspaper and online. One other thing you can do is buy foreclose property lists for your area online. It is important to do research on the properties to see witch ones you will be interested in. It is important to research the property so you won’t over bid. One way of doing this is going and physically taking a look at the properties you think you will be interested in and do an assessment of there value.
Most likely you will not get to see the inside of the house, but you can make an assessment of the house from the outside. You should stay off the physical property if you can. You will not want to get charge for trespassing. It is recommended that you take pictures and write notes about the property; this is a good way to help you to make the decision of what properties you will want. It can also help you to make an assessment on the highest you will pay. When it is time for the foreclosure auction stick to your assessments and do not over bid. You may not get your first choice but it is better to get your second or last choice at below market value than to over pay for your first choice. Buying foreclosure properties does take some work, but the money you will save is worth it.
A good web site where you can see more information on topics like this is Real Estate Facts which is highly recommended. Another article witch is also recommended is Things You Should Know That Can Make A Property Not Worth Investing In Thank you and enjoy.
Article Source : Using Foreclosure Auctions To Buy A House At Below Market Value
Article Source: http://EzineArticles.com/?expert=Kevin_Cox
