By Mark Walters
Just like any other lender, the Department of Veteran's Affairs expects buyers to whom they lend money for property to pay their mortgages on time until the debt is paid off. Sometimes however, like any other lender, the VA is forced to take back a home through foreclosure.
The VA insures mortgages for serving and retired personnel in the armed forces. When one of those borrowers defaults on their VA-insured loan the lender turns to the VA for help. The VA reimburses the lender for the defaulted loan and the lender turns the foreclosed property over to the VA. The VA is not in the property management business, so VA wants to sell the property quickly and recapture its monetary loss.
Right now there are tens of thousands of homes in the VA's inventory. Most of these are sitting vacant waiting for buyers. You don't have to be in the military service or even a veteran to be eligible to buy one of these homes, but you do have to meet the VA's qualification requirements.
Affordable financing incentives and interest rates are offered to all interested buyers so that the VA does not have to pay taxes, insurance, and maintain the foreclosed homes for any longer than absolutely necessary. They are eager to find qualified buyers and welcome all comers.
When searching for a home in a lower price bracket, VA foreclosures are a great place to start. Since the former owner was unable to make their mortgage payments it is likely that the property was not properly maintained making it a good investment for the savvy investor. Often times it is the more run down and unsightly properties you can pick up at bargain prices, fix up and flip for generous profits.
But be careful, you must be very cautious when you shop for VA foreclosures, and do your research before you commit to any investment. A good rule of thumb is that you should be willing to consider a purchase if there is just cosmetic damage to any property. That means paint, minor repairs and clean up. Unless you are very experienced with rehabbing real estate it is wise to avoid a property if real structural damage exists.
A moldy bathroom or a flooded cellar may look and smell off-putting, but they're easy enough to fix, and their presence can drag down a property's purchase price enough to make it a good investment.
A VA foreclosure can be perfect for an investor or a buyer/owner who wishes to purchase a property below market value. In order to obtain a listing of VA foreclosures, check with a local realtor who will have a list on the local Multiple Listing Service. You could also search the Internet under the search phrase "VA foreclosure properties", and adding the zip code of the area where you wish to purchase property.
Here is a web site that lists available VA foreclosures http://www.ocwen.com/reo/home.cfm
There have been a wave of foreclosures with the downturn in the economy. It may a perfect time to gather a group of investors together to buy VA foreclosures by the dozen at deep discounts.
There are other types of foreclosures besides VA foreclosures that you should consider. They include bank owned real estate, preforeclosures and foreclosure auctions. They all offer opportunities to buy property at bargain prices.
Mark Walters is a third generation real estate investor and founder of CreatingWealthClub.com. For a limited time Mark is offering his big guide to finding hard money loans for real estate investing free. Free guide to private money loans. http://www.FindPrivateMoney.info
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