Posted by Ernest Tew on May 04, 2000 at 05:42:27:
Buying repossessed homes can be profitable. But, keep in mind that those “with $500 and a pulse” often don’t relate to price. It’s how much down and how much a month. Usually, they don’t even ask about the interest rate and the few who do often don’t know what it means or how it works.
You will usually find that the repossessed homes are not worth what was owed on them. The lenders usually know that and will often accept 60% to 70% of the loan balance if you can pay them cash.
Acquiring homes and land can also be profitable. When reselling, it is easier for your buyers to obtain financing when the land is included. But, know your market and don’t pay too much. Also, having your homes spread out can add to the time you will need to devote to managing the business.