Successful reward from Repo homes investing requires research, access to cash, a rigorous approach to planning and budgeting, and a flair for negotiation. Have you got what it takes to succeed?
The lender has taken back the home that was used as collateral, usually in accordance with a clause in the Loan contract or Mortgage Deed authorising repossession. For prime lenders the trigger is a default period of 30 days, extended depending on how many payment instalments have been made already, and other client/borrower relationship matters. The clause gives a right of repossession without turning to the courts and is valid in most states.
The lender will be reluctant to repossess, it's a legally complex solution, the complexities of which vary from state to state, can be avoided if the borrower in default declares bankruptcy, and is likely right now to add to the lender's problem of disposing of an ever increasing number of repossessed homes.
More houses for sale than buyers to purchase mean a buyer's market and pressure on sellers to price accordingly. Depending on the neighborhood, city or State the housing market could be in decline, an over abundance of new housing, prices moving down and an inability to price to market once too many foreclosures form in clusters. In any of these scenarios, if the home owner had a level of equity in the home, he could have likely sold to cure the default before repossession. The lender may have already faced a theoretical loss on his investment at the time of repossession.
Does this mean an opportunity for you to invest successfully in a repo? It does and you certainly can take advantage of the housing bubble burst coupled with recent loose lending standards leading to a significant increase in repossessions, and try your hand at making a profitable investment. You will have choice, not such a high level of knowledgeable competition as yet, and a seller willing to negotiate. Whether you will be successful in making a profit from that investment hinges on the strength your intention to be very well informed in this market. This is no standard real estate deal.
