| >Foreclosures |
| Posted by: Jason Oct 3 2003, 12:20 PM |
| A couple of buddies’ and I are interested in purchasing distressed properties, fixing them up and selling them for a profit. We attend many auctions where these properties sell for pennies on the dollar. The problem is, we need the cash before hand. In order to buy these properties we have to have the full amount within 24 hours from the end of the auctions. Is it possible to get loans for these situations? |
| Posted by: loanuniverse Oct 3 2003, 03:50 PM |
| Jason: First, I would have to disagree with you about the “pennies on the dollar” statement. It is my opinion that the best you can shoot for is a discount of 50% from market value, and it is usually much less. There is a reason why those properties are selling for that price. My advice would be to do a lot of research about any property before bidding on it. This includes a “title search” to make sure that there are no other liens on it. Also, depending on the state where you live, there are different types of titles provided in these auctions. Courthouse auctions are notorious for giving title in a way that leaves the property open to other creditors and lienholders. This is the reason why people who do this are usually attorneys or have the benefit of legal counsel. I am not an attorney…. see my disclaimer Regarding your question about loans to finance these investments. Yes, it is possible to arrange a line of credit where you will have the money available almost immediately from a bank and have a cashier check ready in 24 hours. However, it would be very hard to arrange without some substantial collateral. Preferable in the form of a liquid asset. Could you arrange for an unsecured line? Hmmm, maybe…. The three of you would have to approach the lending institution and the line could be repaid from your 9to5 income. Not the kind of loan that a lending officer would be thrilled to do since there is no experience in the business you are going into, but doable. By the way, successful real estate investors usually arrange for a line of credit secured by some or all of their properties to have readily available cash for acquisition and development deals. Good luck. |
