Foreclosure.com Scholarship Program
In existence is $150,000, specifically set aside for the purchase of distressed real estate. This essay will outline a detailed strategy ensuring a maximum return in regard to the financial investment made on the home. Including a description of distressed real estate and foreclosure in addition to how utility can play a role in the decision-making process.
Distressed Real Estate and Foreclosure
Distressed Purchase
Collateral for the defaulted loan. Distressed real estate involves making a distressed purchase. According to Financial Crisis (2011), “[A] distressed purchase is whereby the property owners are usually in a foreclosure/short sale situation.” Foreclosure applies to a residential real estate loan in which a bank or creditor repossesses a home because of nonpayment. The institution will legally possess the right to resell the property as collateral for the defaulted loan. The selling price can be sold at a price equal to or greater than the original loan. The reason distressed properties can be bought at a lower price is the institution has already received a series of payments toward the original home loan. In many situations the lender can sell the house for a lower cost than the normal market value, leaving the buyer the opportunity to make a purchase at a lower selling price than market value and reselling the property at a profit (Demand Media, 2011).
Market Value and Capital
Ideal Purchase
200% profit. The market value of a specific home when purchased is $300,000 and rises over a certain time to $350,000. The individual pays more than 2/3’s of the payments before foreclosure occurs. The specifics of the foreclosure are uncertain; however, this will not affect the resale of...
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...ps occur, the home can foreclose a second time to cover the initial investment. The second foreclosure will not involve the original lender in any manner. Should one make a heuristic decision he or she will find him or herself not considering the “utility of the choice” and in the process may find his or her initial investment lost to the original lender.
References
Demand Media. 2011. Why are foreclosed homes less expensive. Retrieved from:
http://www.ehow.com/about_6720208_foreclosed-homes-less-expensive_.html
Financial Crisis. 2011. What is meant by a "distressed real estate purchase"? Retrieved from:
http://www.financialcrisis2009.org/finance/Renting-Real-Estate/what-is-meant-by-a-
quot-distressed-real-estate-purchase-quot-107911.htm
Willingham, D. T. (2007). Cognition: The thinking animal (3rd ed.). Upper Saddle River, NJ:
Pearson/Prentice Hall.
John Mortimer controls Watson & Musico Developments and is well known for his abrasive style and aggressive approach in business dealings. His firm is rumoured to have a highly restricted cash flow because of its aggressive leasing policy. Because of the depressed real estate market, Mortimer is refinancing all of its properties to reduce its debt service requirements and to generate cash. Since, the amount that could be borrowed from the bank is positively correlated with the appraised value, Mortimer would like his property to be valued as high as possible. Therefore, he would want Richard to value his property at his requested value of $35 million.
An employee of ABC Company, Luke is in charge with a project of developing new purchased land. The company is planning to build an adult entertainment retail store which confidently lay near where his brother, Owen, lives. If the plans are announced to the public, the property of the surrounding neighborhood will drop significantly. What concerned Luke is that Owen just told him about the offer to sell his house at a decent price compared to the current real estate market. However, Owen is considering if he should wait for a couple year and sell his house later at a higher price as the estate value may increase.
Some of the realtors are pushing the home owners to sell the house; therefore,
There is, I believe, no easy way to solve the foreclosure crisis. The reason for this is that the underlying problem is not merely the individual foreclosures. The underlying problem isn’t even all of the foreclosures as a whole which constitute the crisis. No, the real underlying problem is ultimately human greed. Consequently, the way to solve the foreclosure crisis, I believe, is not merely through some kind of “stimulus plan.” Yet, this matter shall be examined more thoroughly later.
Mr. and Mrs. Ricardo owns a vacation home in Cape Cod. They used this vacation home during the summer and rent the property to a family friend for 10 days out of the year. They purchased it 20 years ago for $250,000, spend $100,000 in renovation, and wants to exchange this property for a different vacation home in Miami Beach. This vacation home have been appraised for $850,000.
To solve the foreclosure crisis we must take a multi-pronged approach that tackles the issues making the situation worse and that caused the problems in the first place. Our goal is to do this in an efficient and time conscious manner. Any solution is going to have its positive and negative aspects but we must try to maximize the former and minimize the latter.
The frequency of foreclosure in our nation today is dangerously high. The strain from the recent economic downturn has put many families and individuals in a financial chokehold preventing them from being able to make their monthly mortgage payments. Consequently, many of these people feel they’ve punched a one-way ticket to foreclosure. With all these homes being foreclosed on, we face a very real crisis.
The subject is a two story colonial built in 1988 in the East Creek subdivision of Vienna. It is Good + 10 grade home with 2958 sq. ft. in above grade living area, sited on a 0.2329 acre lot.
According to Kroger (2007) Foreclosures are set in their values and commitments that they learned from their parents and family without any attempts to find a different path (p. 64). Mary Ann has been immersed in her family of males since the age of three. They were farmers in Georgia, and they were farmers in Minnesota. Mary Ann was taught about hard farm labor, poor hygiene, and sex by her father and brothers. Being a little girl with no mother around a pack of men, her father and four older brothers, she only knew the farmer 's life and the ways of men. She’s dreamt about doing other things with her life and pursuing better things than the four walls of that pink and purple mobile home she’s grown up in and continues to live in currently, but because she is so set in her identity she refuses to change. When Guy offered to help Mary Ann move away from Flatwater and the awful job at the potato factory, for a mere moment excitement danced across her eyes but then she pulled herself back in and adamantly refused help, stating she moved around too much as a child and would never move her children, not even once, despite it meaning a possible better life and future for them. Guy then offered to give her money to buy a better home there in Flatwater, again she refuses, even when he offers it as a loan for her to payback. She screams at
Sometimes banks and mortgage companies allow people with good credit to purchase property priced higher than its appraised value. For example, a single female with a good job and good credit was allowed to pay over forty thousand dollars more than the appraised value of the house she bought. Two years later she lost her job and immediately refinanced her mortgage loan for a lower interest rate and payment. A ye...
.Given the choice between two investment properties—both 3-bedroom, 2-bathroom, 1,700-square-foot single family residences listed at $125,500, one a turnkey in Stockton, California, and the other a fixer-upper in Chapel Hill, North Carolina—and the singular goal of turning the maximum profit on my investment, I would choose to purchase the Chapel Hill home. Because I believe that the listing price of that property is lower than its true value, and because I expect a growing real estate market to increase the value of the home by 10 percent over the next two years, I think that with an additional investment of $50,000 in renovations and a two-year buy-and-hold rental strategy, I could flip the Chapel Hill home for more than $180,000 in profit.
Thus, if the borrowers failed to pay their loan the property can be auction by advertised the property to sell in public, it is the bank want to recovers the loans that given to the borrowers. The bank would be determined the offer price of the property based on the amount of loan should to recover. Hence, the offer prices of properties in auctions are lower compared to the market price. Which, the buyers will get to see the property value when an auction event held namely when many bid for the property.
A mortgage is a form of debt, secured by the warranty of a specific real estate property. The borrower is required to pay back the debt in predetermined payments. The most common reason for acquiring a mortgage is to purchase real estate when it cannot be paid for up front. The homebuyer, in a residential mortgage, pledges their home to the bank. Over a period of years, the borrower pays back the loan with interest. Once the mortgage is paid in entirety, the owner retains the property free of any charges. However, in case of foreclosure, the bank has an entitlement on the house, as a form of insurance should the buyer default on repaying the mortgage. The bank can then sell the house, and use the capital to pay back the remaining mortgage.
Home loans, or mortgages, use a borrower's home for collateral. This home can be a single-family house up to four-unit property, as well as condominium or cooperative unit. Lenders fund home loan, but both the lender themselves and broker who act on behalf of the lenders originate.
Remember buyers will also do this before they show up at your door. They will have done their calculations and come up with a reasonable figure that they expect the property to go for. Overpriced homes don 't sell. In fact, they send buyers away and you house remains in the market for years without any potential buyer coming to view it.