foreclosed properties

in my previous post i said that looking for a good foreclosed property is so time consuming and very frustrating. it is a very tedious and a stressful process.

but if you are considering real estate as your investment vehicle then by all means let's explore it.

basic steps in acquiring foreclosed property

1. create a list of properties. you can get a copy of the list of foreclosed properties from sunday classified ads, buy and sell magazines, banks' website and from the banks itself. encircle those that caught your attention. have a short list.

2. prepare a set of questions. write all the things that you want to know. ask for the location map, copy of the title, tax declaration, the terms, is it negotiable?

3. call the banks. look for the asset management department and ask your questions. check if the property you want is still available. ask. ask. ask.

4. visit the property. it is really important see for yourself what the property look like since most of the time it is being sold on a "where-is, as-is basis". in other words, what you see is what you get. some are uncut diamonds while others are pure lemons. so check it out so as not to be frustrated later.

5. make an offer. you can make a bid through auction or negotiated bid.

5.1 auction. check first with the bank if there is a scheduled public auction for their acquired properties. in public auction banks requires no qualifying and no paperwork. just bring the earnest or show money, refundable if you don't win a bid.

5.2 negotiated bid. it's a written proposal that specifically details your bid. you can lower the cost but be reasonable. but unlike the auction, here expect the banks to ask for too much papers for their screening and documentation purposes.

6. learn financial and computer literacy. you must know how to push the numbers to know if you will make money out of your effort. the property may look great but if it's too expensive or the payment terms are too tight for comfort, you may end up broke if you buy it.

continue to learn more and new techniques. and always sharpen the saw.

things to consider in buying a property

1. location. this is the most important thing to consider in buying a property. the property should be a few blocks away from public places like market, school, church, mall and other establishments.

1.1 neighborhood. if you see a fancy cluster of townhouses in a workers' village, it may not be a good buy after all.

1.2 accessibility. the property should be accessible to public or mass transportation.

2. structure. it must be solid and built with good foundation.

3. layout and design. it is a must that the layout and design should have aesthetics sense and of course spacious.

4. facilities. electric and water meter must be in place and working.

5. security. the residents must feel that they are secured 24/7.

do not rush into the first house that you see, there may well be a better option around the corner. make yourself a list of things you feel your desired property needs to offer. when viewing a home tick the items on your list that meet these requirement. don't fall in love with the property. it blurs your judgment. resist the temptation to own. build your dream house later. and besides, it is the capital gains you are after.

never ever forget that you are there to buy and asset, something that adds cash into your pocket. make sure what you buy is indeed an asset that somebody else would like to buy later on.

source: Think Rich, Pinoy! by Larry Gamboa, PhD