REAL ESTATE INVESTMENT

Secrets Revealed: Buying foreclosures. Anyway, having a low down payment requirement is absolutely one of the advantages of buying foreclosed properties. I often listen to people say that investing in real estate requires a complete bundle. I beg to disagree! However, I do understand where these folks are coming from as I too got the same thoughts until I found out that only low down payments are required when buying bank-foreclosed properties which is often called leverage. I’m not really sure what the last sentence intended but what I do understand is that longer payment terms imply lower regular amortizations which means higher positive cashflow.

The last phrase could also imply that you will be paying amortizations predicated on the worthiness of the real estate during the purchase (and that means you peg the price). By the end of the payment period, the worthiness of the property has already valued and you will profit from the gratitude when you sell the property. Hedging essentially means that you buy low now and peg the price because you foresee that the worthiness of the property you purchased will appreciate later.

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8% rates of interest are usually available only for the first year and this is often not just a fixed rate. This means by the end of the year, your loan may be subject to “repricing” or modifications in case the market rates of interest have changed. What happens if a fresh financial crisis happens(God forbid) and interest rates shoot up? Then the interest rate of your loan shoots up as well along with your monthly amortizations, which can lead to negative cash flow situations and more foreclosures even. This is why I often advise that one should ensure that their rates of interest are fixed for the longest possible term.

By just how, other lending institutions like the Pag-IBIG may offer lower interest rates (6% for loans up to Php400,000 and 7% for loans over Php400,000 up to Php750,000). Perhaps transferring a loan from a bank or investment company to Pag-IBIG will be a good option in such instances. Some banks use a Contract-To-Sell (CTS) wherein the Title of the house is not yet used in the buyer before purchase price is paid in full.

In contrast, if a property was bought through a mortgage loan, the Title is already used in the buyer and the same Title is then mortgaged to the lender. Because of this, the last mentioned may require more stringent requirements. Banks are likely to do due diligence before they accept a house as collateral for financing so this is very true.

Peace Corps volunteer, and Richard Deitz, the wiry founder of hedge account VR Capital, which has offices in New York, London, and Moscow. Deitz and Jennings declined to comment for this article. Lynch didn’t respond to emailed questions. A person familiar with the consortium declined any suggestion that the public sale was rigged.