A news report this week said that the number of deals had increased unexpectedly in February but that over half of them were either foreclosures or short sales. This confirms what agents have known for months. The properties that are selling have low prices but the trade off is that they are often in poor condition. Owners that can'tmake their monthly payments don't usually spend for upkeep and maintenance either. And in some cases, angry owners facing foreclosure do intentional damage to the house or strip the fixtures and appliances on the way out. The poor condition of these properties makes them less desirable for buyers and often lenders will not loan on a property in poor condition.
There is a great solution called the FHA 203K loan program. This is a loan program that provides the money to purchase the house and includes additional money to do a rehab/makeover. The FHA will even include the monthly payments for the time it takes to perform the work. The loan is based on the anticipated value of the property after the rehab work is completed. Down payment can be as low as 3.5% and the FHA allows non-occupant co-borrowers as well as gift money for the purchase.
The FHA 203K program is available for up to 4-units as well! Some buyers would rather buy a property in poor condition and perform a makeover to their own tastes than buy one in good condition but not done the way they'd prefer. Information about this loan program is available at: http://www.REOLenders.com or you can call Skip Schenker at 714-681-3768 for details.
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