| Have you ever wondered why some people always | | | | a property contractor to help you inspect the |
| seem to buy properties at greatly discounted prices? | | | | property before you purchase it. Avoid properties |
| The Theory of Value investing or the art of investing | | | | with potential wiring, plumbing and sewage problems |
| in something that has value but is currently | | | | unless you intend to spend a lot of money rebuilding |
| undervalued by the market can be applied to Real | | | | the property from the ground up. Property inspection |
| Estate Investment and provided you do your sums | | | | is a presumed part of any Real Estate Purchase |
| correctly, you can make money from such an | | | | contract so you must inspect the property as the |
| endeavour. | | | | law assumes that any buyer would do so even if the |
| This article will explore three general areas that you | | | | property is being auctioned off. |
| can consider examining to look for bargain Real | | | | 3. Fixer Broken Uppers |
| Estate Investment Properties and explain how you | | | | Some people are fed up with their homes because |
| can take advantage of them. | | | | things leak and the house looks in a general state of |
| 1. Tax Foreclosures | | | | disrepair. If they are really disgusted with their |
| Its not uncommon for rich people to leave large | | | | properties, there would be a chance that you might |
| properties for their children but without realizing that | | | | be able to negotiate for a lower price for the |
| sometimes the Property Tax levied on the property | | | | property because there is so much renovation to be |
| might be huge and the children end up having to sell | | | | done. The tip to this is to bring a contractor and/or |
| the property. Another situation arises when the | | | | architect with you to learn all you can about how |
| existing occupants of the property are unable to pay | | | | much it would cost you to fix the problem in the |
| the property tax and a tax lien is then levied on the | | | | property and resell the property. There are many |
| property. Sometimes the tax authority then orders | | | | people today looking for real estate to buy, rebuild |
| for a sale of the property in order to collect the | | | | and then resell and you can make money from this |
| money owed to it. | | | | Real Estate Investment Strategy. |
| Tax liens attach to the land meaning that when you | | | | So in other words, you will be looking for run down |
| buy the property, you purchase it with the tax lien | | | | property that you can spruce up with a minimum |
| attached to it. So you would want to do your sums | | | | hassle and cost. Such properties can also benefit |
| and scout the potential demand for property in the | | | | from the economies of scale. By this I mean that |
| area before you plunge in and purchase the property. | | | | once you spend some time examining an area and |
| One common strategy is to buy, divide and build, in | | | | find that most properties have a similar problem |
| which you buy a piece of land and then you divide it | | | | which you can solve, why not purchase more than |
| and build several properties on it and then re-sell it | | | | one property and rebuild several units in the same |
| out. | | | | area at the same time and duplicate your efforts and |
| 2. Mortgage Foreclosures /Bank Auctions | | | | reduce your effective building cost. |
| Mortgage Foreclosures and bank auctions usually go | | | | In conclusion, always take your time to explore and |
| together and occur when an individual is unable to | | | | examine each real estate deal or property |
| pay for his mortgage. The bank therefore wants to | | | | investment that catches your eye and you may be a |
| foreclose the property and get the proceeds of sale | | | | lot richer for it and be able to get a property at a |
| to pay for the amount outstanding under the loan. | | | | cheaper price from the market. Always remember |
| Like in most negotiation situations, the more | | | | that in terms of negotiating power, try not to look |
| desperate the bank is to sell the property, the better | | | | too interested and let the more desperate seller |
| your chances of purchasing a property at a greatly | | | | reduce his own price. Take some action today |
| reduced price. | | | | towards your investment dreams. |
| You might want to bring along a house inspector and | | | | Copyright © 2006 Joel Teo. All rights reserved. |