Many investors have heard that some of the best deals in Florida are foreclosures.
How Good are the Deals ?
According to RealtyTrac foreclosed properties sell at 38% below regular non-distressed sales.
In October a client bought one of these condo for $ 110,000. The developer sold 2 identical for $ 175,610
Aren`t Foreclosures Risky
Buying foreclosed properties carry some additional risks.
Many of the same questions apply to buying properties that you are unfamiliar with generally:
· Do the units tend to have certain repair issues ?
· How much do they rent for ? Are they easy to rent ?
· Is the HOA (Condo Corp) financially sound ?
· Are there special assessments or leasing restrictions ?
In foreclosures there is usually less information available to work with and tighter time constraints in the deal.
One solution to reduce uncertainty is to do the same deals in the same buildings over and over again.
In buildings where we actively trade we are aware of all of the above points before an offer ever goes in. This cuts down the live issues to the physical inspection of the unit itself and particulars of the individual deal.
Experience also comes into play in evaluating the unit. If you have replaced the flooring or kitchen in a similar unit it is easy to come up with a relative accurate assessment of work and cost.
Likewise the best way to know about the rental market in a building is to be actively managing rentals. In that case you can know how long it took your agent to rent the last one and how much they got for rent before you buy.