Buying Foreclosed Homes With No Money Down-buying No Money Down

Buying foreclosed homes with no money down.

Buying foreclosed homes with no money down is a very popular investment strategy. Investors have long worked with local banks to create The Cash Out when buying foreclosures. Simply, this is a modification of what is called a construction loan and a 203K loan. See www.hud.gov.com and www.constructionloancenter.com

How does it work? Construction loans are most often story loans. In other words, the lender needs to know what exactly you want to accomplish, why you want to do it, and how you intend to accomplish it e.g. what is your 'story, before they can recommend a program and approve your loan. For instance, if you intend to live in the home after the project is complete (owner-occupied), your options, rates, and even potential lenders may be very different than the same loan to an 'investor' who intends to immediately resell the property.

Lets say you buy a foreclosure for $50,000. The home needs $10,000 repair work and the bank pre-appraises the home as finished at $100,000. Upon completion of the home you close on a new mortgage of 80% loan to value of $100,000. This gives you a mortgage of $80,000. You have $60,000 in the home and $ 20,000 cash out that you keep tax free. The $10,000 repair money is drawn from your account prior to closing and becomes part of the final mortgage. Essentially, there is no money out of pocket. Now you repeat this and the cycle continues. For many investors this is the best loan for buying foreclosures.

For more great videos visit www.profitoncrash.com or call David Lehman at 877-345-1776

by: cast wider

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