Buying Foreclosure Property
by John Appleseed
Every investor who wants to buy a foreclosure home has the sole objective of optimizing the value of the property. Usually, investors go about this by buying out the equity from the homeowner. This act relieves the owner of payment problems and also allows the investor to obtain equity in the property. This method is called "subject to" purchase, which implies that the current financing is maintained, with your purchase "subject to" that financing.
Evaluating properties
One key point to note in the assessment of an offer is that you should match your profit margin against the owner's net equity and not the gross equity. For instance, if a homeowner has a property valued at $100,000 that requires $5,000 worth...
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