Pre-foreclosures - Finding the Right Neighborhood to Purchase in

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Pre-foreclosures - Finding the Right Neighborhood to Purchase in

Author: RandyMcGregor Total views: 10 Word Count: 488

Many people are either losing their homes to foreclosure or walking away because it doesn't make sense for them to keep making expensive mortgage payments, when the house is worth less then the remaining mortgage. Currently 50% of home sales across the US are foreclosed homes. Although the real estate crisis is worrisome for homeowners, it is providing opportunities for families and investors.

Donald Trump is a great example of someone who was investing in real estate during a downturn in the market. Now look at him! "There are always opportunities", he is quoted as saying. "When I first started out in Manhattan, everyone was saying what a terrible market it was". He admits if he had listened to the nay Sayers he won't be were he is today.

Many real estate experts including Donald Trump agree that now is a great time to invest in real estate and understand that pre-forecloses offer one of the best, if not the best, real estate opportunities.

The main reason is unlike foreclosures, a pre-foreclosure is made privately between the owner and buyer and therefore avoids the bank auction foreclosure process. This provides many advantages to the buyer including more time to inspect the inside of the house and a better chance to establish a mortgage with a bank.

When looking to purchase a pre-foreclosure you also need to pay closer attention to the macro aspects (I'll cover micro aspects in a later article) of the property in order to limit your risk as much as possible. Some of these property macro aspects are:

- Try to find out how many other homes in the neighborhood are in pre-foreclosure or foreclosure. It's best if the home you're interested in is one of the only houses under financial strain. In order for properties to appreciate the number of foreclosures has to be minimal.

- Check with the local tenants to see what the rent levels are and whether they have been increasing or decreasing over the last little while.

- What is the local economy like at the town, local city and/or county level? Is the unemployment rate increasing or decreasing?

- Check with local authorities to become informed about any infrastructure projects that may be planned within the next two or three years. Things such as new buildings and highways being built or corporations moving into town can be a positive indication of future growth.

- Consider the age of the majority of the population within the community. If the majority of the local population is seniors that own homes, that could translate into an excess of future housing as they move into elderly care facilities.

If you do your homework and find the majority of these answers to portray a positive community, then you should consider buying in that area. Buying pre-foreclosed homes at the right time in the right place can prove to be a very profitable venture.

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To find the best pre-foreclosure sites the web has to offer check out government auctions review or go direct to foreclosures

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