How to buy foreclosures

[Josh Brosius]

I am looking for my first house and have an interest in building a multifamily portfolio. As I'm looking on Zillow for an idea on prices of local houses, I see a lot of foreclosure homes that I like and have listed on Zillow for over a year. I heard you get foreclosure homes at a bargain price sometimes. If so how does one go about getting to buy these homes. I live in. New York and know there is a process to getting a foreclosure home. I'd like to weigh all the options for buying a home and find what ones best. Any help describing foreclosure and how to get one would be greatly appreciated!

[Chinmay J.]

Originally posted by @Louis L.:

@Chinmay J. Whats the reasoning for not being able to get a loan? Is there any provision like some of the government loans where you need to put in a certain amount of work in order to get the loan? Or would you say the chances are slim to use debt to acquire a REO? Im sure things may vary (im in nyc) but nonetheless im interested

A lot of these properties are trashed, and traditional banks don't want to risk their money on these kind of properties. You are correct in stating that for banks to lend govt backed money, the properties have to meet a certain basic criteria. Government wants to prop up the home ownership in the country - not necessarily drive your investment goals to fruition. You will typically see listing agent advertise it as Hard Money or Cash only.. 

Now some of these properties are in decent state, and you can get an FHA mortgage on it - especially if you want to owner occupy the property for a year and fix it up with FHA 203 K rehab loan, you can certain go that route. After 1 yr of living, you can sell or put it on rent.

Here is what is awesome... When a house goes up on HUDHOMESTORE website, for first 15 days only owner occupants can bid on the property. So if you are in a position that you are able to move your primary residence, you should strongly consider trying to buy a HUD home. Fix it.. Repair the crap out of it.. Refurbish the living daylight out of it.. and then after one yr, you can put it on market to sell or rent it out.