Why should more investors consider Boise bank owned property?
Far too many homeowners have lost their homes, and even more are in the process. This difficult state of affairs for so many local homeowners seems like it is the worst case scenario in so many people’s minds, but there is a silver lining to this dark cloud.
The quick skinny on Boise bank owned homes
Many buyers are looking at Boise bank owned homes to find what they are looking for and are getting some great deals in doing so. The dynamic behind this is that when a bank forecloses on a home, the amount of the primary loan is erased and the home is sold for as close to market value as is possible, or for an agreed up on liquidated value. This increases opportunity for many buyers to purchase at decent discounts and get properties that are bank owned, and wouldn’t otherwise be on the market.
What if the bank owned properties in Boise are in a state of disrepair?
Many people are not aware of this, but getting a special kind of loan that allows you to do repairs on the bank owned properties and rolls those costs into the loan is once again available. It is called a “203b” loan, or a rehabilitation loan, and many homeowners are finding them necessary to purchase Boise real estate right now. When you understand that many of the bank owned homes are left vacant for several months while in the process of being taken back from the initial homeowner, processed through the banks REO department and then finally assigned to an REO agent for sale or liquidation, you can understand why this is the case.
Using a rehab loan to bring your recent purchases in your real estate portfolio is not the only way to bring the home up to par, but a great way to use the banks money to do it so you can spend your cash, 401k or Roth IRA money somewhere else.
Is buying Boise bank owned homes a good investment strategy?
When it comes to buying in today’s market, there are essentially 3 types of sales. There are conventional sales in which the homeowner is not underwater and can sell the home without coming out of pocket or shorting the bank. There are short sales which can take an extreme amount of time and may not even yield a purchase for sure. And, there are bank owned, or REO properties, which have the least amount of red tape of the latter two.
When you compare buying short sales to the other two, you have a poor comparison just because a short sale is the worst case scenario for investment or buying real estate in general. Given that there are so few homes that fall into the conventional sale category, you are basically left with buying bank owned homes in Boise. When you consider that, at regular intervals, bank owned homes will actually be cheaper than conventional sales, you have to include it as a great procurement strategy.
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