Ohio Bank Owned Properties – Start Real Estate Investing

February 3rd, 2009 admin Posted in Bank Owned Properties | 1 Comment »

It has been predicted that nationally 2 million home owners will lose their properties to the foreclosure process by the end of this year. Foreclosure levels have risen dramatically and there are many Ohio bank owned properties up for sale. But why is this?

One of the major reasons for people losing their homes is job losses; this is particularly true of the Rust belt which includes Ohio, Michigan and Indiana. The suburbs and cities are most hard hit by job losses.

The second reason is the adjustable mortgage rate, this fluctuates together with the lending rate and many mortgages that are linked to ARM were easy to purchase when the prime lending rate was low have now become unaffordable. Home owners who were paying $300 have seen their mortgage repayments skyrocket to $400 and more during a very short time and they become unaffordable. 63% of all new mortgages are ARM’s.

Interest only mortgages are another reason, banks and mortgage brokers have lured people with a good credit record to take loans that eventually cannot be afforded. The loan is made with the property buyer only paying the interest, then this is changed to a higher interest rate plus full payments.

Lending to bad credit risk individuals at high interest rates – mortgage brokers and banks are both guilty of this. They lend to bad credit risk individuals who have low incomes and no health insurance. 40% for home owners who require emergency foreclosure assistance stated that medical costs kept them from being able to make their mortgage repayments. This practice does not create wealth for high credit risk individuals, it destabilizes them and their community, instead of stabilizing their lives and helping them build equity.

It is difficult to see this kind of situation as an opportunity for anyone, but an investment in Ohio bank owned properties means that if the property is not re-sold, it can be rented. With all the foreclosures taking place, rental property is in great demand. This helps the community too because the house does not stand empty. Another reason is that the wise investor can amass property if they have the resources to purchase and hold onto it. The property can be developed, lived in, rented or even used as a tax shelter.

Investing in Ohio bank owned properties is a good way to make money. For first time investors however, there are a few important facts you need to know when searching for a property to invest in.

• Location, location, location, this is a real estate slogan that applied to all property purchases.
• How close are the schools, parks and shopping centers, and do they have a good reputation? This is a great selling point.
• Does the house need major repairs? This could mean you might lose a large part of your potential profit.
• Conduct a title search; liens will be revealed with a title search.
• Do you have the financial ability to tackle this project?