Finding and Buying Distressed Properties: What Hard Money Borrowers Need to Know
If you’re looking to buy a distressed property or fixer-upper, it’s not uncommon to seek out a hard money loan or “bridge loan” - especially for highly-competitive real estate markets, when you don’t have the time or the luxury of waiting for the bank before you pounce on a good deal. But not all distressed property deals are good deals. How do you know what to look for and what to avoid? Let’s take a closer look: Foreclosure Auctions A foreclosure auction is one in which properties are auctioned off to the public and are sold to the highest bidder. It’s common for lenders to bid on the full amount off their loan in order to recoup their losses, but the big attraction of foreclosure auctions is, of course, the excitement of winning. The successful bidder could very well obtain a below-market price for the property, however buying up foreclosed properties is not for the beginning bargain hunter. Even with the prospect of a below-market price, there is the possibility that the tit