Great that you are looking into investment properties in Miami (Aventura); there are certainly a lot of opportunities offered out there and the experts agree that it might be a great time to invest now. Sometimes it can be an ideal way to capture a home at a great value, even below appraised market value. For many real estate investors, though, there is a common misconception, primarily the result of misunderstood and falsified media or miscommunicated Internet anecdotes. It is very important to understand when is the best time to purchase a distressed property - in most cases, the real opportunity may exist before the home even reaches foreclosure status also known as ‘Short Sales Opportunity’.
For the majority of professional real estate investors, the common consensus is that pre-foreclosure (short sale) is the ideal time to buy an investment property and not when the property is bank-repossessed. Because mortgage companies and lenders are not in the home ownership business, the lender will often work with the anticipated investor in an effort to keep the home away from foreclosure. Once the bank has repossessed a property the game changes. Trust me, banks know exactly what a property is worth and they will not give it to you for ‘pennies on the dollar’. Why do you presume so many households are currently struggling with banks to cut a better deal for themselves, to lower monthly mortgage payments and they were and are not successful? Banks carry the property as an asset and not as so often falsely presumed a “liability” (unless you are dealing with a mortgage servicer, they indeed want to get rid of any property they repossess as quickly as possible, but such properties are very often in a very desolate condition). Especially now, when banks know that they can hold on to these assets for a little longer and probably get fair-market value from the Treasury or affiliated (assigned) investment companies in the next few months spending half of our $700 billion tax dollars to recapitalize.
Consider this: With a pre-foreclosure home purchase (short sale), you will have the opportunity to inspect the property prior to purchase, unlike purchasing the home in a foreclosure proceeding or auction in which no inspection is permitted or at least is very, very limited. In most cases foreclosure sales are ‘as is’ sales and the bank is not liable to repair or release you from any contract you may have signed with it. I have seen numerous speculators buy these foreclosed properties for “pennies on the dollar” and then found out that it was virtually impossible to obtain homeowner’s insurance for the investment they just made.
When you buy pre-foreclosure properties (short sales) the regularly scheduled professional home inspection will ensure that you’ll know and understand what repairs must be made prior to and after purchase and that your investment will be insurable.
The way we work with our client-investors is that we inquire about exactly what they are looking for, how much cash they are capable and willing to put down and then we start scouting the exact location(s) (neighborhoods) clients prescribe. Keep in mind that you are not the only one out there looking to get a great deal; there are professional Realtors who made this their main business and there are certainly professional investors (individuals and investment funds), subscribing to the same services and techniques as Realtors do and have access to –data identifying months in advance who had difficulties in making monthly payments (or is making late payments).
Giving you a list of foreclosed properties many times means “this is what others considered not investment worthy” that’s why it is still out there and it will eventually go to a hyped-up auction. There are once in a while great, overlooked foreclosed opportunities, but they are fairly rare.
For more information, please feel free to call us and our highly specialized team will assist you to find the right property for you.
Brosda & Bentley Realtors
Aventura (Miami) (786) 406-1757 http://www.sunnyislesbeachbroker.com/