Buying multi family homes in pre-foreclosure: a general primer

Buying-multi-family-homes-in-pre-foreclosure-a-general-primer-2There are several options available for people who desire to invest in the real estate market.

Single-family homes can be used to generate rental income or they can be purchased, renovated and resold for a profit. But for a more long-term investment, buying multi family homes in pre-foreclosure can offer greater income from a resale.

Multi family homes include structures such as duplexes, apartment buildings and apartment complexes. You can use the rent generated from the units to pay the mortgage of the buildings. However, the initial purchase of such structures can be costly if done in a traditional manner. It is often possible to buy multi family homes in pre-foreclosure for a fraction of the market value.

Many multi family homes in pre-foreclosure were originally financed by federal government agencies such as Fannie Mae, Freddie Mac, the Veterans Administration (VA) or the Department of Housing & Urban Development (HUD). These agencies all offer single and multi family homes for sale, many of which are in pre-foreclosure.

Once you have located a property, you must obtain financing, since most pre-foreclosure purchases require the potential buyer to have funding in place before an offer is made and this is especially true for multi family housing transactions. Fortunately, many of the very same agencies selling a multi family property in pre-foreclosure have programs to assist those who are interested in purchasing homes from their listings. Another added bonus is that qualifying for financing is a bit easier through these agencies than with traditional lenders.

Buying-multi-family-homes-in-pre-foreclosure-a-general-primer-1After you secure your financing source, you should verify that the chosen property is suitable for its intended use. You must conduct an inspection of the property separate from that performed by the owner. Among the things you must check include the structure’s soundness, infestations of insects or rodents and general cosmetic condition. If the structure is found to be lacking in any of these areas, you should estimate the potential costs of repairing the deficiencies and decide if buying the structure is still an option.

Whether you choose to invest in single or multi family dwellings, it is important to do your research first and it always helps to have the advice of an experienced professional to turn to. RealtyNow can help by connecting you with local real estate professionals, today.

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