Reaping repo rewards - BUY FORECLOSURES WITH NO MONEY DOWN. 100% Financing is NOT Gone

Reaping repo rewards

Want to brave the wild world of foreclosures? Follow this advice.
By David Whitford, editor at large - December 24, 2008

NEW YORK (Fortune) - As home prices continue to skid and foreclosure rates soar (up a further 38% since the third quarter of 2007), some investors are on the lookout for outrageous bargains. Think you're ready to jump in?

Consider paying cash
Some transactions require that you close within days. That's not enough time to get a bank loan. A so-called hard-money loan is an option, but you'll pay 15% plus points, and you can't count on refinancing right away.

Perform due diligence
Foreclosures are typically sold as is, where is, but you can inspect the property before you bid. Even after you put down a deposit, you can change your mind and get your money back. Private auctions typically offer a bigger window for deliberation than public auctions on the courthouse steps.

Hire a licensed appraiser
You don't care how much the lender has discounted the note; all that matters is how much the house is really worth. Only an appraiser can tell you that. Could cost you a few hundred dollars to find out. Could save you a few hundred thousand dollars once you know.

Buy short
Instead of foreclosure, buy what's known as a short sale - a negotiated transaction involving you, the bank, and the homeowner prior to formal foreclosure. You'll have more time to arrange financing - and since the lender has fewer costs to recover, you may get a better price. Check public NOD (notice of default) listings for prospects.

And probably the best option yet, buy a foreclosed home through a private lender who offers 100% financing wth great terms. You don't have to go through all the formal bank processes nd the transaction is ten times more simple than going through a conventional bank.











Parts of this article are contributed by Laura Boyajian.