How To Make Money Buying And Selling Houses While In A Recession

People are quickly becoming interested in real estate for the simple fact that when

they buy an R.E.O (Bank Owned Real Estate), Short Sale (Property sold prior to foreclosure at a discount) or any other type of distressed asset they can fix up the asset and sell it for a huge profit than sometimes equal more than what most American's make working a 40 hour work week. For example, you can buy a house for $210,000, put $20,000 into the property to make it look better, then sell it for $330,000. That would be a $100,000 Gross Profit! How many of those you can do this month before you have to quit your day time job?

Another option, you can find a Hard Money lender. A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost never issued by a commercial bank or other deposit institution. Hard money is similar to a bridge loan, which usually has similar criteria for lending as well as cost to the borrowers.

The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money often refers to not only an asset-based loan with a high interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring. Source of definition www.wikipedia.com

Many hard money mortgages are made by private investors, generally in their local areas. Usually the credit score of the borrower is not important, as the loan is secured by the value of the collateral property.[1] Typically, the biggest loan one can expect would be between 65% and 70% of the property value. That is, if the property is worth $100,000, the lender would advance $65,000'70,000 against it. This low LTV (loan to value) provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property. But with plenty of hard work and a little elbow grease, it will definitely pay off in the long run.

Do not get me wrong, there will be many long hours spent driving through old neighborhoods looking for luxury homes for sale at a discounted cost. The first trick is to know exactly what you are looking for. You have to know what will sell and what will not. For instance, a home with at least three bedrooms and two baths are going to be a more popular choice than a home with two bedrooms and only one bath. Also, a home with walk-in closets and also a garden tub is going to be a quick seller.

The buyers are going to look for is what type of neighborhood is the home located in? Is it near any grocery store or a school? The next step would be to know what you are willing to pay. For instance, you would never want to purchase a home that needed a bit of work unless it was a luxury home that would be so very easily. You have to consider the fact that any remodeling costs will come out of your profits. If you have the time and the resources to fix the home up yourself, this may be a good choice. Never take on a home improvement project that you are not secure in doing.

by: Clinton Douglas IV

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