6 Reasons to Buy Foreclosed Homes

ALISO VIEJO, CA, November 04, 2010 (Press-News.org) Ever since the real estate market went bust, the number of properties in foreclosure because their owners were unable to meet their mortgage payments has skyrocketed. Even the rich are walking away from their homes.

According to a recent RealtyTrac, Inc. report, US home foreclosures are continuing virtually unabated, with increases in every state. In other words, distressed properties are dominating today's real estate market.

However, many experts say that there is bad and good news in this mess. While some people are losing their homes, others are making wise investments by buying them.

"I see today's real estate market as a gold mine or a once-in-a-lifetime opportunity for investors," says Steve Dexter, co-author of the new book "Buy & Hold Forever: How to Build Wealth for the 21st Century."

"Historically low mortgage rates, historically low property prices and a historically high number of unique foreclosed properties present extraordinary conditions to become a real estate owner," says Mr. Dexter.

In "Buy & Hold Forever," Mr. Dexter and co-author David Schumacher reveal investment techniques that can work in the midst of a slow real estate market or a booming one, for first-time buyers or seasoned investors, and for buyers of single-family residences, apartment buildings or shopping malls.

"Some people mistakenly think that foreclosed properties are undesirable, and that they'll only be found in the middle of nowhere," says Mr. Dexter. "But today's real estate market is filled with high-end, luxury foreclosures in fantastic neighborhoods that could satisfy even extremely picky buyers."

When buying a distressed property, investors have two options: buy it either at a public auction or through a bank or other lending entity. Statistics show that most foreclosed properties are REOs—owned by banks or government agencies.

So, what are the advantages of investing in foreclosed properties?
• Low purchase prices, sometimes as much as 75% below the 2008 high
• Unique or luxury property features that might have been unaffordable previously
• Desirable locations—the economic downturn has impacted the middle class and even the wealthy
• Excellent property conditions—many homes are either new construction or recently renovated
• Good school districts, which mean instant value

"Foreclosed homes are priced much below the market value, and there's always room for negotiations and no extreme bidding wars. That's why many investors find foreclosures to be excellent long-term investment opportunities. The rule is: buy low and sell high," says Mr. Dexter.

About the Authors
DAVID SCHUMACHER, PhD, was an investor, magazine columnist and college instructor in the field of real estate. One of America's premier experts, he was also a multimillionaire property owner. He parlayed a modest investment into property holdings worth $20 million, including houses, condos and magnificent oceanfront apartment complexes in Southern California. He also authored "The Buy & Hold Real Estate Strategy" and "Buy & Hold: 7 Steps to a Real Estate Fortune."

STEVE DEXTER is the president of National Capital Funding, based in Laguna Beach, California, and an expert commentator for CNN/Money, CBS Radio and Fox TV. He is the author of "Real Estate Debt Can Make You Rich" and "Beat the Banks: How to Prosper from the Rising Wave of Bank Foreclosures."

For more information, contact Steve Dexter at stevedexter@hotmail.com.