The most essential aspect of any form of real estate investing is locating good deals that showcase clear profit potential. Needless to say, it’s not an exact science, and there is plenty of variables involved, in addition to a certain amount of inevitable risk. Presently there are, however, ways to increase your possibilities of locating and securing a money-maker. Keeping that in mind, we provide this overview of buying in Chicago— short sales, foreclosures, and auctioned properties.
A short sale in Chicago comes to pass when a property owner can no longer make mortgage payments and is close to or actually in default. During that situation, the property sometimes leads to a short sale. So rather than the loan being paid off, the property is sold, typically at a price below what is owed on it– a great advantage for investors.
Investing in short sales in Chicago can be a lot slower and annoying than an everyday real estate deal. You may want to be prepared to sit tight because it can sometimes take a bank several months to answer a short sale offer. On top of that, when you make a short sale offer and the seller accepts it, the seller’s mortgage lender still has to accept the offer for the deal to pass through.
While lots of folks consider it way too much of a hassle, pursuing bank foreclosed properties is an excellent way to grab cheap investment properties. Local real estate agents are a fantastic source for finding out about foreclosures.
Banks operate in the business of providing capital, and they don’t like to become property managers– which works in your favor for buying foreclosures (as well as short sales) in Chicago Banks are often times very ready to negotiate and offer substantial discounts to get the properties off their hands and the deals off their books. But you do have to learn about how the operation of buying foreclosures works.
Additionally, the foreclosure process can take a very long time, years in some situations. And this means that by the time a property goes to sale, it may need repairs and upgrading, which means that you can get it at an even much better price.
Real estate auctions are public sales of residential properties usually conducted in the case of foreclosures, bank repossessions, or delinquent taxes. The absolute best places to discover auctions in your area are local classified and other ads, internet-based sources, real estate brokers, and auction houses.
The four main kinds of real estate auctions are:
Absolute auctions – With this, the highest bidder automatically wins the property.
Reserve auctions – The lender can reject an offer even though it is the highest bid.
Minimum-bid auctions – With these, the bidding begins at an established amount.
Foreclosure auctions – The properties usually sell below market value, and lenders can not turn a profit from the auction.
The point to bear in mind about buying auctioned properties unlike most cases of buying short sales or foreclosures in Chicago is that you typically need to have cash. You should be equipped to pay right then and there if yours is the winning bid. So make sure to identify ahead of time the opening price for bidding (if any) and the difference remaining on the mortgage (if you can).
Buying short sales, foreclosures, and auctioned properties in Chicago can clearly be a really good financial move– just as long as you do the necessary homework, comprehend the process, and are more than willing to jump through the hoops. The competition, though, can be high because a lot of the buyers have cash in hand. Often times, it is best to team up with a professional investment company.