subject: Investing in Distressed Real Estate [print this page] Investing inTempe Arizonareal estate can be somewhat tricky in today's economy. The national unemployment rate is close to double digits and the stock market is in constant turmoil with no sign of stability. While the city ofTempe Arizonahas been affected by the shock felt around the world, it has been somewhat insulated. With the university in Tempeand state government jobs in nearby Phoneix,Tempe has been able to keep unemployment under the national average, and this is why investing in distressedTempe real estate can be very profitable.
As with other parts of the country, foreclosures inTempe have been on the rise. Many of these foreclosures are distressed and need a little 'TLC' before they are marketable. The banks are somewhat apprehensive about sinking more money into their losing situation, thus limiting the marketability of these properties to those that have a lot of imagination and cash.
Not so fast, there is a loan that is unknown to most and misrepresented by many; the FHA 203k. The 203k, which allows potential homeowners to finance the rehabilitation, is a loan offered by the Federal Housing Authority. This loan is designed to bring homes up to FHA standard after close of escrow. It is one loan, which is calculated by taking the purchase price and adding the rehabilitation cost, then subtracting the 3.5% down payment.
Most repairs that are attached to the structure are allowed. There are some limitations on luxury items such as pool repairs, landscaping, etc. See FHA guidelines or contact your local lender for a list of eligible upgrades.
By investing in Tempe bank owned properties, youcan create instant equity. Do your homework first, hire a good real estate agent and a seasoned loan officer; it will simplify the process and make it more enjoyable for all.
