The latest trend in Las Vegas real estate consists of hopping aboard a bus and viewing multiple foreclosure homes. With market prices plummeting, Realtors and private investors are being forced to develop unique and creative marketing tactics to lure in buyers for their ever-growing list of distressed properties.
It’s no secret that the Las Vegas real estate market looks bleak. Let’s face it, the real estate market is bleak everywhere you turn. In some areas, foreclosure rates have soared by 57-percent, leaving a trail of vacant properties and nearly ghost-town communities. It’s a sad state of affairs. However, it is also a real estate investor’s dream come true.
An interesting aspect of Las Vegas foreclosure home bus tours is they offer one-stop real estate shopping. Participants quickly view houses and if they are interested can schedule an appointment to return for a personal showing. Tours last about two hours and approximately six to eight homes are presented.
Typically, foreclosure tour organizers require participants to sign a contract stating they will use the company for all their real estate needs, should they decide to purchase a home. A loan officer rides along and provides information on monthly payments, interest rates, etc. of the various properties. Anyone interested in purchasing a property can have the loan officer draft an offer on the spot. It’s really quite convenient. Or is it?
While it might be convenient to board a bus and browse several homes at one time, foreclosure homes are not always the best deal. In fact, foreclosure homes are notorious for being in need of serious repair or renovation. Oftentimes, homeowners who have been evicted from their homes, vent their anger on the house. It’s not uncommon to find torn up carpet, broken windows and drywall that has been punched with a sledgehammer.
Few foreclosure homes are in perfect condition. Most are in dire straits both inside and out. When it comes to landscaping, people facing financial challenges aren’t usually too interested in curb appeal. Not only will the interior need refreshing, chances are considerable exterior repairs will be required as well.
A lesser known, yet better way to invest in distressed properties is to seek out real estate owned (REO) properties owned by banks or private investors. These homes arrive at the bank after being placed on the foreclosure auction block. The primary reason they didn’t sell at auction is because more was owed on the home than it was worth.
When the bank receives the foreclosed property, it eliminates the mortgage, reduces or eliminates any creditor or tax liens, evicts residents who may still be residing in the home, and occasionally will invest in repairs. In other words, much of the time-consuming paperwork and legal hassles have been eliminated. All investors have to do is spruce up the property and sell it for a reasonable price.
The best way to locate REO property is through a private investor who purchases bank portfolios. These investors are able to purchase homes at wholesale pricing because they buy in bulk. Since they purchase these homes for pennies on the dollar, they are able to pass the savings along to individual buyers. These properties are usually sold in “as is” condition. However, the buyer will already have 30- to 40-percent equity in the property because he was able to purchase at wholesale cost.
The trick to getting the best deal on REO properties is to purchase them with cash. This allows the buyer to close the deal in around 10 to 15 business days, as opposed to the 30-45 day timeframe imposed with conventional financing. This delay can significantly reduce investors’ bottom-line and slow down the process of selling the property for profit.
Instead of riding around town on a bus and engaging in speed-viewing foreclosure homes, consider working with a private real estate investor who specializes in REO bank portfolios. Doing so, could potentially save you a considerable amount of time and money.