If you’re in the market to purchase a home, you may want to take a look at some other options.
A great option to owning a home could be rehabilitating an older home or a bank owned property called a REO (Real Estate Owned).
An REO is real estate that was foreclosed on, but one that didn’t sell at a foreclosure auction, so now it sits on the banks books as a liability. Some people would call this property an asset, but any asset that costs you money or isn’t making you money, isn’t much of an asset is it?
With the liquidity issues in today’s market place, sitting on a liability, like real estate doesn’t make much sense, and banks need to become more liquid.
So the banks are willing make deals.
Bank owned REO properties can be purchased for as little as 50 cents on the dollar!
Whether you’re a first time home buyer or a real estate investor a fantastic way to purchase these properties, are with FHA 203K loans.
The FHA 203K is a little known loan program that allows first time home buyers and investors to purchase homes cheaply and fix them up.
Imagine as a first time home buyer, being able to purchase a home for 50 cents on the dollar, fix it up to the way you want it and then move in!
Also imagine that the mortgage payments, during the rehabilitation process and the construction costs were rolled into your loan!
You don’t have a mortgage payment until you actually move in!
For the savvy investor a FHA203K loan works a little differently, but it’s still a the best loan product out there.
Investors are required to come up with a 15% down payment, but you can finance the construction costs, and mortgage payments during the construction process. And the loan is transferable!
Imagine they you put your 15% down, begin the rehab, get to the point where paint, carpeting, flooring, and cabinets are ready to be ordered and installed.
You start marketing the property. Find a qualified buyer and let them choose their paint colors, carpet, flooring and cabinets.
Once you’ve completed the project, they assume the loan at appraised value and you get your money! Your 15% down payment and any money that you saved on the construction costs! This is where you make your money!
