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Archive for the ‘Cheap Real Estate’ Category

Why is there cheap real estate? Is it just that some sellers don’t know what their property is worth? Sometimes this is the case, but only rarely. More often a seller is willing to sell for less because it means selling faster or more easily. In other words, sellers will trade a little equity for a fast sale or peace of mind, as in the following situations.

Ten Cheap Real Estate Motivators

1. Death – After the death of a loved one, family members may want to sell any real estate cheap to be quickly done with the bad memories, or to get their inheritance faster.

2. New Job – A job transfer or new job can give a person a lot of motivation to sell fast, and therefore sell cheap. Often, the seller will end up with two payments, and you will be helping by taking one off his hands.

3. Divorce – When people divorce, sometimes they need to sell to settle things, and the faster the sale, the sooner they get to be done with it all. Also, sometimes neither one can afford a home that was being paid for with two incomes. A fast sale prevents late payments and credit problems.

4. Behind in Payments – If a seller is already behind in payments, he or she is facing possible foreclosure. Selling to you at a discount is preferable to losing a lot more equity in a foreclosure.

5. Back Taxes – In most places an owner has to be more than a year behind on property taxes before he faces losing the property. If he is close the the deadline, however, you may get a deal. Just be sure you take into account the taxes that have to be paid.

6. Absentee Owner – It is difficult to deal with a property from a long distance, especially rental units. These sellers often get to the point where selling fast and regaining peace of mind is more important than getting full market value.

7. Income Problems – Whether due to a lost job or declining business, a seller may no longer have the income necessary to keep his home or other real estate. He may need to sell fast to avoid further financial problems.

8. Negative Cash Flow – It doesn’t make sense to lose money on real estate every month, so sellers with negative cash flow may drop the price to sell fast. Just be sure that you have a plan to increase that cash flow once you own the property.

9. Damage – This is one of the most common reasons for cheap real estate. The walls have holes, the roof needs replacing, and the cats peed all over the carpets. Fixer-uppers always sell for less, and the scarier they are the cheaper they get. But be sure you know what you are getting into.

10. Sudden Cash Requirements – Sometimes a seller has a better investment or other reasons to need cash fast. For example, selling fast might prevent him from losing another property to foreclosure, or it might mean getting into an investment that will make him far more profit than the little bit of equity he loses selling cheap to you.

Other reasons people sell below market value include sickness, partnerships gone bad, bad tenants, excess debt, and any number of changes in people’s lives. Remember, however, that the immediate reason for a lower price is to get a faster or easier sale. To get cheap real estate, then, make offers that close fast and easy.

When you need or want to buy residential or commercial Real Estate property that is cheap you might have to do some serious looking around before you find the property that suits your needs and is within your budget. It goes without saying that there are a few things that you need to look for when you are looking for a piece of property that is both cheap enough that you can work with it and yet not so damaged that you will have to put far more money, time and material into it than you originally imagined you would need to.

If you are looking for a really great deal on a Handyman Special or FSBO property that definitely needs work you need to remember that there are going to be some properties that are so far gone that the only choices for them would be to bulldoze it or have a builder/investor that has the financial backing necessary to make all the necessary repair. When you are looking at handyman special properties that need work you will need to have a home inspection on the house and all buildings on the property in order to determine if there is more that needs repairing than you can handle. You might be wise to have a general contractor accompany you (that is unless you are a builder or general contractor) to give you his/her opinion about the property and the prospects that they see for it. You might not think that this is needed, yet that second opinion about the property might be what makes or breaks the deal.

When you are putting together the Contract of Sale you need to make sure that the specific terms of the deal are spelled out in no uncertain terms. If you are willing to buy the property completely “As Is” and are not asking for any specific considerations or repairs on Houses for sale like this, this needs to be spelled out in the contract. You want to make a low offer at first so that you and the owner have room to negotiate.

Why is there cheap real estate? Is it just that some sellers don’t know what their property is worth? Sometimes this is the case, but only rarely. More often a seller is willing to sell for less because it means selling faster or more easily. In other words, sellers will trade a little equity for a fast sale or peace of mind, as in the following situations.

Ten Cheap Real Estate Motivators

1. Death – After the death of a loved one, family members may want to sell any real estate cheap to be quickly done with the bad memories, or to get their inheritance faster.

2. New Job – A job transfer or new job can give a person a lot of motivation to sell fast, and therefore sell cheap. Often, the seller will end up with two payments, and you will be helping by taking one off his hands.

3. Divorce – When people divorce, sometimes they need to sell to settle things, and the faster the sale, the sooner they get to be done with it all. Also, sometimes neither one can afford a home that was being paid for with two incomes. A fast sale prevents late payments and credit problems.4. Behind in Payments – If a seller is already behind in payments, he or she is facing possible foreclosure. Selling to you at a discount is preferable to losing a lot more equity in a foreclosure.

5. Back Taxes – In most places an owner has to be more than a year behind on property taxes before he faces losing the property. If he is close the the deadline, however, you may get a deal. Just be sure you take into account the taxes that have to be paid.

6. Absentee Owner – It is difficult to deal with a property from a long distance, especially rental units. These sellers often get to the point where selling fast and regaining peace of mind is more important than getting full market value.

7. Income Problems – Whether due to a lost job or declining business, a seller may no longer have the income necessary to keep his home or other real estate. He may need to sell fast to avoid further financial problems.

8. Negative Cash Flow – It doesn’t make sense to lose money on real estate every month, so sellers with negative cash flow may drop the price to sell fast. Just be sure that you have a plan to increase that cash flow once you own the property.

9. Damage – This is one of the most common reasons for cheap real estate. The walls have holes, the roof needs replacing, and the cats peed all over the carpets. Fixer-uppers always sell for less, and the scarier they are the cheaper they get. But be sure you know what you are getting into.

10. Sudden Cash Requirements – Sometimes a seller has a better investment or other reasons to need cash fast. For example, selling fast might prevent him from losing another property to foreclosure, or it might mean getting into an investment that will make him far more profit than the little bit of equity he loses selling cheap to you.

Other reasons people sell below market value include sickness, partnerships gone bad, bad tenants, excess debt, and any number of changes in people’s lives. Remember, however, that the immediate reason for a lower price is to get a faster or easier sale. To get cheap real estate, then, make offers that close fast and easy.

If you are looking to acquire your own home or invest in real estate property, you might want to consider checking out public real estate auctions in your area. In auctions you will usually find foreclosed properties that you may get at lower than market value if you are the highest bidder.

You must however keep in mind that these are previously owned properties so you may not actually be sure about the state of these properties until after you’ve purchased them. That means that before participating in public real estate auctions, you must have the correct set of expectations.

Remember that if you have gotten the property at the auction for a price way lower than market value then you might have to be prepared to do some investment in refurbishing the property. There also may be legal ramifications when you’ve purchased properties from real estate auctions so it is advisable to consult a real estate lawyer for instances such as these.

Now, if you have made up your mind about participating and purchasing from real estate auctions, the next step is to decide which real estate auctions to check out. The U.S. government, through its Treasury department usually holds hundreds of public real estate auctions a year on properties that have foreclosed.

These means that these are real estate properties that have been previously owned and for one reason or another, its owners have been unable to continue paying for the property, which has caused it to foreclose. On some instances, the properties at real estate auctions from the government are seized properties due to criminal causes.

To check out on these real estate auctions by the U.S. government, you can look at listings from the Department of Housing and Urban development (HUD), or even IRS foreclosed properties, and properties from the General Services Administration (GSA). There are sure to be public real estate auctions in your area where you can register to bid and purchase that dream property that you have been hoping for.