Foreclosures are a popular yet risky investing venture, especially for intrepid investors that have little to no experience dealing with auction foreclosures. To minimize the risk, it is wise to proceed with a solid understanding of the risk involved. If you’re thinking about using hard money loans for an auction purchase, keep in mind some of the following.
One of the biggest and most common risks involved with auction purchases is there is no way of knowing what condition a property may be in. As opposed to an REO, you cannot do a walkthrough of the property to determine what kind of state it’s in. Hence, there is always the possibility of buying something that may require thousands of dollars in repairs before it can be sold.
Typically, liens are gone in foreclosure but that is not always the case. You may need to take care of unpaid property taxes, junior liens, and other unforeseen fees if you buy a property at auction without being aware of the history regarding its title and finances. Make sure to do as much homework on the property as possible to minimize the risks.
This update is by hard money loans Miami company Monroe Funding Corporation, a direct equity lender serving clients throughout Central and South Florida. We specialize in first mortgages on non-owner occupied residential and commercial property investments as well as real estate loan options. Our fast and flexible loan programs get you to the closing table quickly and professionally. For more information on investor resources Miami or Tampa hard money lending, please call 954-816-0388 or fill out our application.