Whether you're a real estate investor looking to fix it and flip it or you're a do-it-yourself kind of homeowner, house rehabbing just may be the best bang for your buck. And with the current economic climate, there couldn't be a better time to find a bargain basement deal on a house in desperate need of repairs.
Today, an astonishing number of home owners are unable to make payments and are forced into the foreclosure process, finally losing their homes to the bank or lender. These homes, known as Real Estate Owned (REO) property, are just sitting on the bank's books waiting to be cleared, and, as a result, are being sold at dirt cheap prices. Banks are not in the business of maintaining homes and are highly motivated to sell property, even well below market value prices. Lenders are even willing to waive attorney fees and eat the costs of back taxes and liens on the home.
Many real estate investors are gun shy about rehabbing houses in a down turned economy. But with the right REO house in the right location at the right price, it's really an investment no-brainer. You can re-sell property at a higher rate than the bank, generating more money and gaining higher returns on REO homes.
For first-time home buyers, the savings often far outweigh the cost of house rehabbing. Many home buyers are able to qualify for affordable FHA financing that includes the cost of the home and the cost of repairs -- all in one loan. Plus, just like other home purchases, buyers are entitled to hire an inspector to find out exactly what's wrong with the property and what needs to be fixed before purchasing an REO property rehab home. With the help of the FHA loan, you could be paying the same or less for what you're renting now.
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