If you are looking for a great deal on a profitable investment property, then you will want to consider purchasing from an auction. These properties are being sold by mortgage lenders who have been forced to repossess a home, housing associations or are homes that have remained vacant after the owner has passed away. Whatever the reason is for the sale, the common factor is that the owner wants to sell the property quickly. Because of the desire for a fast sale, the prices can be well below the market value of the property.
These auctions tend to cater to real estate professionals so the advertising of the auctions and the space at an auction is limited. The auction house has specific rules and knows that the general public is not normally going to meet the requirements for making a purchase. The auctioneer wants the site to be filled with only legitimate potential buyers as this will generate a better selling environment and hopefully a higher sale price.
You will want to secure funding to make a purchase prior to the auction so that you know how much you can afford to bid. Understand that once you place a bid, you are legally bound to complete the purchase if you are not out bid. You will also need to provide a 10% cash deposit at the time of a successful bid. After the auction you will sign a contract and normally you have 28 days to pay the remaining balance of your bid.
If you have a line of credit or other means of securing a loan that is not based on the value and condition of a specific property, then you will be able to bid on several properties. If you are only securing lending for a mortgage on a specific property, then unless you have the winning bid on that property, you will be leaving with nothing.
When time permits, it is always wise to visit the property and to have an inspection done on the property. There can be many hidden issues within the building that are not readily visible. An inspection is another way to protect your initial investment and to also be more certain that you have the potential and ability to make a good return on your investment.
Attending a few property auctions before you intend to begin purchasing is a good way to learn the process and get a feel for the environment. But if you are new in the real estate investment business, it is important that you seek the assistance of an investment professional. They know the local market, the potential issues that can arise from a property purchase at auction and also some of the other potential investors. Visit www.azrealestatewholesale.com to learn more about the benefits of working with an investment realtor to ensure that your first purchase is smooth and offers you a large return on your investment.