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Why You Should Be Buying Foreclosures Right Now



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By : John Hanlin    99 or more times read
Buying foreclosures is one of the greatest wealth building opportunities of our generation. Best of all, by investing with REO companies, you don't have to be an expert to share in the profits.

Foreclosures have been front page news across America for the past couple of years. And this phenomenon is expected to continue unabated for the next 2-3 years, if not longer. As a result, foreclosure property investment has become an industry unto itself.

As foreclosures were just beginning to grab headlines, various investors and real estate professionals began to approach banks for their lists of "REO properties".

"REO" is an acronym for "Real Estate Owned" by banks and other lenders. In other words, REO properties are homes that have been foreclosed upon and repossessed by the banks.]

When the banks supplied investors with their REO properties lists, they usually provided the prices that they would accept for the homes. There was little negotiation at that time, as the banks weren't willing to drop their prices much below the loan balances owed on the original loans. In these early stages, making a foreclosure property investment was a difficult process and was typically done on a local bank-by-bank, home-by-home basis.

That changed when foreclosure properties began to sweep across the U.S. like a tidal wave. Banks are being inundated with mortgage defaults every week and have become much more aggressive in seeking means to cut their losses and unload their REO properties. This is because it costs money to hold onto a house with no payments coming in. The banks still have to continue paying maintenance expenses on every one of these homes. As a result, they have become much more willing to negotiate and accept lower prices for their REO properties -- laying the groundwork for a "perfect investment storm" for savvy investors.

As the foreclosure situation has escalated from being a "problem" into a "crisis", a select group of people will capitalize on this extraordinary financial opportunity in the midst of all the chaos. (Buying foreclosures.)

This group of individuals shares several key attributes. (Because you are reading this right now, you probably are one of them.)

THE KEY ATTRIBUTES SHARES BY THIS GROUP OF PEOPLE ARE:

  • VISION: The ability to identify an opportunity while the masses see only calamity and confusion.

  • STRONG DESIRE TO BE SUCCESSFUL: These folks are driven to have more. They are highly motivated to succeed financially.

  • HIGH TOLERANCE FOR "EDUCATED RISK": These folks are risk takers, but not "blind" risk-takers. They make calculated risks, but they don't over-analyze the opportunity until it's too late either.

  • COURAGE TO ACT: To quote General George S. Patton: "A good plan, violently executed today is far and away better than a perfect plan tomorrow." Nothing happens if you don't take action. These folks, after identifying and assessing an opportunity, take swift and decisive action.

It is a fact that more millionaires came out of the Great Depression than went into it. Many of the richest people in the world today, made their fortunes when the economy had hit rock bottom. These people recognized the fact that real estate, stock markets and economies are all cyclical in nature. They shared the same four key attributes listed above and they took swift and decisive action. The question is: "Will you?"

WHAT MAKES THIS OPPORTUNITY A "PERFECT STORM" FOR INVESTORS?

Two important realities that are public knowledge regarding residential real estate in America today are:

  1. There is a glut of homes on the market right now in many areas of the country. In other words, we are "over-built".

  2. The U.S. population is projected by the United States Census Bureau to grow +29% between the years 2000-2030.

WHAT DOES THIS INFORMATION TELL US WITH REGARD TO BUYING FORECLOSURES?

First, it tells us that we currently have more homes available than we have people to buy them. Second, it tells us that this is only a temporary situation.

How do we know that? Well, if you do the math, we are going to have approximately 82 million (that's 82,000,000) more people living in the United States by the year 2030!

And I can tell you, without hesitation, that despite being over-built today, we do not have anywhere near the amount of homes available to house 82 million new people. So, the bottom line is that we will absolutely grow out of the current "over-built" situation. The $10,000 question is: "When?"

Depending on the "expert" opinion that you subscribe to, that timing is somewhere between 2-3 years away.

WHY IS THIS RELEVANT FOR BUYING FORECLOSURES TODAY?

As long as there is a glut of homes on the market, the pressure on home prices will continue to be downward. This is basic economics:

EXCESS SUPPLY = LOWER HOME PRICES

Let's say that you are an investor who is looking to make a profit by purchasing and reselling REO properties. Not only can you acquire the REO properties for pennies on the dollar today, but you can be quite confident that the value of the REO properties that you acquire will appreciate within the next 2-3 years. (Sooner, in some markets.) The reason for this is also basic economics:

INCREASED DEMAND = HIGHER HOME PRICES

And, according to US Census Bureau statistics, this increased demand is going to come from 80 MILLION new people that will be added to the U.S. population between the years 2000-2030.

Q: DO YOU HAVE TO WAIT 2-3 YEARS TO PROFIT FROM BUYING FORECLOSURES?

A: ABSOLUTELY NOT! YOU CAN EARN EXTRAORDINARY PROFITS RIGHT NOW IF YOU KNOW HOW AND WHERE TO INVEST IN REO PROPERTIES.

My suggestion is to educate yourself about "REO COMPANIES" asap -- they are experts in buying foreclosures and turning profits for their investors.
TO LEARN MORE ABOUT BUYING FORECLOSURES & REO COMPANIES:

REO Companies
Foreclosure Investment
.
.
AUTHOR'S BIO:

John Hanlin is an Independent Investment Consultant specializing in low risk, high yield investments secured by real estate. He is a seasoned investor of over 25 years, manages the investors' website: www.JohnHanlin.com and authored the book "The LazyMan's Guide to Understanding Foreclosures & REO Property Investment" (available at www.LazymanCompany.com).


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