How to Buy a Bank Owned Property at a Discount Using a Little Known Government Program

I will show you that by using a little known governmentnext step is to make an offer, remember you're
program called a 203(k) you can have instant equity.looking for a "fixer upper". Don't over pay for the
There is a little known government renovation loanproperty! This is the way you are going to get built in
called a 203(k). Don't let the numbers intimidate you, it's"instant equity" when you close on the property.
just the section of HUD's FHA programs. What thisThe appraiser then gives you an after renovation
program allows you to do is buy a home from a bankvalue. You will then see what work needs to be done
that needs work. Many foreclosures that are comingon the property to bring it up to that value. Usually it's
on the market are being trashed by the formersomewhere between $15,000-$35,000. Almost
owners. Now, these repairs are mainly cosmetic suchinvariably you can count on increasing equity 150% of
as cabinets, carpet, plumbing fixtures, and paint,whatever your costs are for example if it cost
however, you can usually purchase these homes at a$20,000 dollars your equity will probably increase by
substantial discount.$30,000.
The first step is to get pre-approved by a lender forReal Example This is a transaction I just completed ,
the maximum loan amount that you can qualify for.Purchase Price $375,000, repairs totaled $38,000, the
You may not need the maximum loan amount but youafter Renovation Value was $413,000. Actual
need to know how high you can go on an offer. ThenAppraised Value After Completion $450,000 so there
you need to locate a real estate agent that specializeswas instant equity of $37,000.
in REO's (bank owned properties). Don't be surprised ifAs you can see the home in the above example was
the agent doesn't know anything about the program,purchased for a substantial discount compared to
your lender can give him or her all the information. Theother homes in the neighborhood.