November 17, 2017

Benefits of Investing in Foreclosures

Foreclosure acquisitions present many benefits to multiple parties involved. The investor benefits with a profitable return, the local community benefits from being transformed into a stable home, and even the current homeowner can benefit from contract for deed options. According to a recent Housing Wire article, “In today’s market, many investors appreciate foreclosed properties’ value as investments because they are generally more affordable to obtain and later renovate fore resale.” Unfortunately, as the popularity of an opportunity grows, so do the marketing predators trying to push expensive programs and workshops on potential unknowing investors. In reality, unless the investor is working with someone who specializes and operates in this market every day, they will likely become very frustrated and reap no benefits from their foreclosure endeavors.

The PIP Group is a true turn key service provider, which means we have the resources to handle the entire legislative process of foreclosures from start to finish. We handle all of the due diligence within 24 hours of the purchase and perform market analysis daily, as well as determine which areas are the most profitable to our clients and which properties in those areas are the most viable. If you are interested in investing in foreclosures and benefiting from this type of investment, there are some options you need to know first.


What is a Foreclosure:


“Foreclosure” can be a very broad term because they are so many types of foreclosures, including bank foreclosures, tax foreclosures, secondary market foreclosures, per-foreclosures, and short sales (which are basically per-foreclosures). There are foreclosures that are quick and clean and those that require additional legal involvement. There are foreclosures that are good candidates for “flipping” properties and there are foreclosures that are good for “cash-flowing” properties. The type of foreclosure that may interest you as an investor depends on the type of investor you are.


Flipping Properties:


As quickly as “reality” TV shows are popping up about Fix/Flip, so are service providers and salesmen ready to teach you -sell you- the next great opportunity. Everyone seems to have the next great idea. However, at PIP, we are not trying to sell you on an idea, we are offering you the opportunity. It has become nearly impossible to be certain as to who you can trust and what should be considered a good provider coupled with equal profitability. That is why at PIP, we focus on integrity and transparency with our clients through out the entire process by posting updates and reports and being available to our clients if they have any questions or concerns throughout the process.

Investors that are looking to resell the foreclosed assets have the option to work with a number of construction and rehabilitation contractors and put the property back on the market. As an investor with PIP, we coordinate the construction and rehabilitation work for you so you do not have to deal with the headaches associated with the process. As a PIP client, you get to sit back and receive updates and reports on how the property is doing while we do the rest. And although the PIP Group is a pretty large firm, we still operate with a scalpel, not a chainsaw. We focus our resources on what is going to enable us to work consistently and expediently. We have a number of attorneys, contractors, agents and vendors that have built a level of trust and confidence in and know how PIP Group does business and the quality of workmanship that we expect. We believe that every detail matters, so we do not spread ourselves too thin. By focusing on specific markets, not only ca we keep tabs on the economic impact of those markets, but our field managers can also focus on the very simplest of improvements to maximize profits. For example, if we can re-face the cabinets in the kitchen instead of replacing the cabinets or if we can use hardwood in a certain room rather than carpet, we could have a great opportunity to save on expenses and our clients will in return profit more. This type of detail is impossible if you are marketing as a turn-key provider that does this all over the country.


Foreclosures can lead to additional income through renting:


Today the American dream has expanded from owning just one house and has expanded to the possibility of owning multiple residential properties that can provide a second income. Foreclosures offer an opportunity for the investor to add to their ROI potential and generate regular income through rentals. We offer the opportunity for current homeowners to pay a monthly rent to the investors. This way, the investor wins and the bank wins because it avoids the dreaded eviction process while still ensuring that the property remains occupied. The current homeowner also wins because they get to stay in their home.

There are a variety of different terms associated with this process including Contract for Deed, Lease Purchase Agreement, Owner Finance, Private Mortgage, Lease Option, Performing Note Acquisition. All of these terms refer to the process in which the investor owns the property, someone else wants to own the property, and you sell them the property and provide them with a finance option over a short period of time. In other words:

  1. A long term occupant/renter learns his landlord has not been paying his taxes on the property.
  2. By notice from the PIP Group, the occupant is informed that our clients are now the owners and if they promise to not destroy the place, we promise to not evict them.
  3. Not only will we not evict them, we will sell them the place with payment terms that are very similar to the rent that they are already paying.

This process allows the occupant to become the owner of the property all the while adding to our investor’s profitable returns.

As you can see, foreclosure offer a unique investment opportunity. However, it can be a long, frustrating and overwhelming process if not handled by a knowledgeable and experienced individual. At the PIP Group we believe that an informed investor is a profitable investor and we urge each and every one of our clients to educate themselves prior to making any investment decisions. That is why we provide an array of educational materials and videos to our clients and maintain constant and open communication throughout the process. To learn more about foreclosures and the many benefits of investing with PIP Group click here.





About the author 

Charles Sells

Charles Sells is the founder and CEO of The PIP Group, a turnkey service provider that focuses on investments in distressed real estate assets including tax liens, tax deeds, traditional foreclosures, fix-and-flips and long-term cash flow acquisitions. He has been involved in tax lien investing for over 20 years, during which time The PIP Group has grown to become one of the largest agencies of its kind with nearly 1,000 individual and institutional investors worldwide.

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