Real Estate Foreclosure Investing – The Perfect Storm

After one and half years of declining housing sales, the trend is changing and sales are bottoming in most regions in the US. The latest US Housing Numbers (released July 30, 2009) reported that the rate of declining home sales is decreasing at a lower rate and is on a path of actual overall growth by years end.

Possibly related is the fact that the majority of areas in the US are starting to see the values of their homes increase once again. This is a long time coming as many people have seem their home investment turn upside down, meaning the mortgage owed is more then the house is worth. So with the housing prices starting to rise it signifies hope that more homeowners will be above water again before long. It’s morel lift is already starting to improve sentiment, which in turn will help the US come out of the current recession at a quicker rate.

Simultaneously the number of foreclosures is still increasing resulting in a surplus of foreclosure homes on the market for investors to choose from. Surprisingly there have been more then 1.5 million homes that received a foreclosure filing in the first half of 2009. Foreclosure investors can get the absolute best value right now, many times for 30%-40% less than the building and land costs. They can also feel comfortable because the price of the homes have bottomed. So not only are foreclosure investors receiving a deep initial discount on a home they will start to benefit from property appreciation.|

If the cost of a house is $ 100,000 and is foreclosure discounted 40% ($ 60,000) and the property value 30% above that cost ($ 130,000), then the investor has immediately doubled their investment. This occurs far more often than you would expect, however, in order to double your money property improvements must be done to improve it’s curb side appeal. Often this simply requires a good cleanup and some paint.

Probably the best investment available is obtaining a foreclosure, improving it’s visual appeal and flipping or renting it; just ask Donald Trump. Most home buyers either do not understand foreclosures so they are reluctant to try, or they have a false perception that good foreclosure properties are hard to find. That’s okay if that is what they inaccurately believe, it just leaves that many discounted houses left for astute investors like us.

To review the top sites with the most foreclosure and property tax sale listings (over 500,000) visit Property Foreclosures.

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