Indiana Foreclosures for Sale

Posted in Foreclosures For Sale, October 31st, 2008 |

There are many advantages to buying properties from defaulting homeowners, however these are risky, and the risk has to be measured by the investor. Some investors believe that this is far too risky and there is too much hard work involved, while others believe there is not enough reward in this. For some investors it is a matter of ethics, and they may be plagued by moral dilemmas such as are you taking advantage of the homeowners troubled situation, or helping him when he is in need?

Concerning Indiana foreclosures for sale, both the home owner and the lender lose. However neither one wants this to happen. They are both motivated to resolve the foreclosure situation with the least amount of trouble possible. For this process to be successful, both the homeowner and the lender should be motivated to agree to the pre-foreclosure deal.

The window for an investment opportunity in Indiana foreclosures for sale, in particular during the pre-foreclosure period, starts with the date of the Lis Pendens being issued. This is notification that tells the homeowner that legal action is pending. The investment window closes on the date that the auction takes place and the property is sold. The time period between these two dates provides the investor with an opportunity to formulate a workout strategy for purchasing the property prior to the date of the sale on auction.

The amount of time given the homeowner between Lis Pendens and auction date; varies from state to state. It depends on the local law as well as the way in which the property owner behaves. In New York this process can take as long as a year or more, where in other states they are sold from 90 – 120 days.

In terms of an ethical outlook, bear in mind the homeowner is in default, the purchase of a pre-foreclosure property will help him. The investor will rescue the loan and this maintains the value of both that property and the properties in the immediate surroundings. If there is adequate equity in the property, there is huge potential to satisfy all of the concerned parties, as well as make a very good profit. Pre-foreclosure investment is all about purchasing the equity in the property, and negotiating with the bank and homeowner to reach agreement, then re-selling the property to make a profit.

The general idea is to create a “win – win” situation for the lender the homeowner and the investor.

If this is carried out correctly, discounts will average at around 20 – 35%. It is possible to secure a low down payment when the deal is structured properly, and unique, very flexible Indiana foreclosures for sale agreements are able to be reached.

One of the major difficulties in this scenario is that the homeowner is sometimes very difficult to contact. There is a great deal of competition and court house procedures and research can be cumbersome.

Cons: It is sometimes difficult to contact the property owner. You will usually have a lot of competition. The court house research can be cumbersome. You may need to negotiate with the lien holders. Investors should adhere to stringent guidelines to enjoy success.