FORECLOSURE » Prevent Foreclosures

There are many resources available for potential first time home-buyers. One option is through the U.S. Department of Housing and Urban Development (HUD) as they have incentives and procedures in place to make purchasing a HUD foreclosed property enticing to dwelling shoppers.When home-owners default on anFHA (Federal Housing Administration)insured mortgage the home eventually becomes the property of HUD. To mitigate the loss caused by the foreclosure, HUD will sell off the property.

In general, almost anyone can qualify for purchasing a HUD foreclosed property. Like purchasing any other type of home, money for a down-payment is a necessity, as well as the ability to qualify for a mortgage. HUD first tries to seek home buyers who are interested in making the property their primary resident. However, if after the required waiting period the property does not sell to an "owner-occupant," then investors may also purchase the HUD properties.

Purchasing a HUD foreclosed property may be especially enticing to those working in certain professions because there is a "Good Neighbor Initiative." HUD foreclosed properties indesignated areas are available to teachers, firefighters, non-profit agencies, law enforcement officers, emergency medical technicians and local governments at discounted sales prices.

Consumers interested in purchasing a HUD foreclosed property need to work with a HUD certified real estate broker. All the properties available for sale can be viewed on the HUD website. Like foreclosed properties offered by a bank, HUD encourages the buyer to make the proper inspections before finalizing the home purchas, as HUD will not make any financial contributions to repairing the home to the liking of the new owner.

>>Foreclosed Purchases

Profiting from a foreclosure purchase is a goal for many first time real estate investors. It seems simple enough, buy a diamond in the rough for $25, put $100 into in a coat of paint and then sell it for hundreds of thousands of dollars. The concept is simple, but the process can be painstaking and require a lot of hard work, determination, and dedication from the investor. There are two basic ways an investor can make money on a foreclosure, either flip the property and sell it or rent it out.

The concept of flipping a home to make money on a foreclosure is to:

• Buy a low-cost house or apartment in a great location with excellent potential
• Secure the lowest rate mortgage to finance the purchase of the house and minimize your out of pocket purchasing expenses, since this is not a long term investment there are many mortgage options to choose from
• Invest some money (and lots of elbow grease) into fixing up the home and making it market ready
• Sell the home at a price that covers the initial investment, the cost for the repairs, pay off the mortgage and sell it for a profit
• Appreciate the house value

Fixing up and renting foreclosed properties is another way to make money in the real estate industry, you can do so by:

• Buy a low-cost house apartment in a great location with excellent potential
• Secure a low fixed rate mortgage to finance the purchase of the home since this is a long term investment it is better to know the long term rates so you can decide upon a rental fee
• Invest some money (and lots of elbow grease) into fixing up the home and making it market ready
• Calculate a rental price that should cover your monthly expenses for your mortgage, property taxes and income
• Find a tenant for your home and make sure to have them sign a lease

Whether the purpose for your purchase of a foreclosed property is for living or for making money - it is advisable that you do a thorough research of the property and the paperwork that is involved so that there are no surprises.

>>See Conditions of Foreclosed Homes

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