Everybody knows that if you want to make money you need to buy low and sell high and this is one of the main reasons that investors are drawn to Government foreclosed homes. In this article we're going to look at why buying government owned homes can be a good investment opportunity and how you can find out about opportunities in your area.
There are a number of reasons why government agencies end up owning real estate. Government agencies that lend money directly would foreclose just like a bank does, when the borrower fails to make several payments. Other agencies do not make loans directly but rather guarantee loans made by banks or other lenders. If a borrower fails to make payments in this situation, the government agency would pay off the bank and take ownership of the property. The IRS might take real estate from people who have not paid their income taxes. In some states, counties will take property from people who have failed to pay their property taxes.
There are a number of different scenarios in which various agencies will end up taking ownership of real estate. The one thing that all of the agencies have in common is that they are not in the real estate business and they need to generate revenue by unloading these Government foreclosed homes.
Investors are attracted to these homes because of the opportunity to buy property at a significant discount. You probably won't be able to buy a $500,000 house for $10,000 but you can regularly find homes to purchase at 20% to 30% below market value and it is even possible to get properties at 50% or more off of fair market value. Discounted prices enable savvy investors to buy low and sell high and provide tremendous investment opportunities.
Many people who are interested in investing in Government foreclosed homes don't know where to begin looking. You can search online for information about some of the various agencies that have foreclose homes for sale such as HUD, the VA, the IRS, etc. Some government agencies also sell their properties through real estate agents and if you find an agent that specializes in these types of properties they may be able to provide you with a number of good investment opportunities.
Instead of doing tons of research yourself, there are inexpensive services that will do the research for you and provide you with a monthly list of all the Government foreclosed homes in your area. For a small fee you can get a huge list of potential properties and save yourself hours and hours of research time. This is a great option that would allow you to spend your time looking at houses and making offers rather than trying to track down potential opportunities.