A commercial property is an investment or an income property like buildings or a land used to generate incomes, either from capital gain or profit, such as office buildings, restaurants, shopping centers, hotels, industrial parks, warehouses, and factories. Commercial properties normally must be zoned for business intents, and can also cover residential domiciles such as apartment buildings, multi family residences. It is possible to invest in commercial property directly, or through Real Estate broker specialized in commercial Real Estate. Investors receive income from rents and capital appreciation if the property is sold at a profit.

If the property owner neglects to pay the loan on the property, he will face foreclosure.

How to invest in commercial foreclosures?
More often the tenant will remain in the property, if any, in the building. Some times the establishment is vacant and may even have some damage.
In order to buy foreclosed commercial properties, you should connect with a commercial real estate broker who is familiar with the market and the area you wish to invest. Many investor will look for foreclosed commercial real estate close to home. Others will invest in a different state and hire a property manager to supervise the property. Wherever you decide to invest, do your home work the same way you would with any investment.

The first step in buying commercial foreclosures is not different from any other foreclosure investment.

Identify desirable neighborhoods.
Prefer neighborhoods where you would want to live or own a property.
This will reduce the size of the search.
Nota bene: There is money to be made in less desirable neighborhoods, just make sure that the price is right.
Explore your possibilities – There are a number of Websites in the internet like foreclosure.com that offer thousands of foreclosed properties at your fingertips.

Determine the property value
Square footage
Size of the land
Location
Comparable prices for other similar homes in the neighborhood
Condition of the property, often you will need to do some repair in the house depending on how long the property is abandoned.
Make sure there is no lien on the property, they usually put on the market free and clear
Schedule an inspection as soon as the offer you made is accepted.

Look for a good commercial real estate brokers, when you are ready to invest in commercial foreclosure. They are not only privy to the listings of the properties, but they will negotiate for you own interest. In some cases, there is an attorney in the commercial real estate team, they will facilitate the sale of the property and advise you on how to take title to the property. A plus of having an attorney on a team is that the bank takes more seriously the negotiation. When it comes to business dealing lawyers are held to higher standards than anyone else. For those who are worried about investing in commercial foreclosures because they have heard stories of raptorial practices will prefer dealing with a commercial real estate bokerage that have a attoney in the office.

stagging to make the property more attractive to buyer.

The first step is getting the buyer inside the house, let’s start to stage the front of the property don’t forget we just have one first impression let’s not neglect it.
Let’s give the house a curb appeal.
Cut the grass, trim the hedges, unclutter the yard, gather the pots together, switch dead plants with yellow flowers , get red of spiderweb, dead bugs, trash, clean sidewalks use a pressure washer, give a coat of paint if needed.

Now let’s take care of the inside

The house must be clean and tidy!
Clean windows inside and out
Get rid of the living ecosystem
Clean out cobwebs.
Re-caulk tubs, showers and sinks.
Polish chrome faucets and mirrors.
Clean out the refrigerator.
Rent a pro steam vacuum cleaner or start with a fresh new carpet.
Wax hard wood floors.
Dust ceiling fan blades and light fixtures.
Bleach dingy grout.
Make sure there is no strange odors,, no one likes a nasty smell.

RealtyTrac announced the launch of the RealtyTrac Community, a new social media platform that allows RealtyTrac’s millions of visitors to pose questions and exchange answers about real estate online.

Read this article:
RealtyTrac™ Launches Online Real Estate Forum Focusing On The Foreclosure Market

Now that you have invested time and money in a property, it’s time to put the house back on the market.
The best way to do that is trough marketing so there is some tips you will need to do so.
Make a list of all the special features that the property offer. Such as a pool or many bedrooms; shopping center; office; or something your home doesn’t have, such as a traffic-heavy neighborhood…

Target the people who will be drawn to these features. By newspaper ads with key word such as “Parents’ Paradise,” or “Pool Party Pleaser.” Target workers or shoppers with “Walk to work,” “Shop-a-holics Paradise,” “No Commute” write flyers and placed where workers or shoppers will see them with the approval from business owners of course.

Make flyers highlighting your property and pass them around the neighborhood. Neighbors often have friends that visit and like the area.

Let people around you know. The more you publicize, the more likely you are to find buyers.

Have an open house a you might just find a someone interested, maybe a family member is looking for a home in this neighborhood.

Offer owner financing. Sometimes people would like to buy a home but don’t have enough down payment or satisfactory credit to go through conventional path to buy a property.

Offer a home warranty. Knowing they won’t have to deal with any repairs for a year will give buyers peace of mind.

A new online survey conducted on behalf of RealtyTrac and Trulia between November 5 and 9, 2009 showed showed a notable decrease in consumers’ willingness to buy foreclosed properties.

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New Survey From Trulia And RealtyTrac Shows Investors, Trade-Up Buyers And Renters Most Likely To Consider Foreclosure Purchase

Whenever you buy a grow house, you are dealing with toxic mold from the high humidity required to provide water for growing cannabis, you need to be very cautious.
Unfortunately high humidity provide a perfect environment for mold to grow which can be very hazardous for your health such as asbestos …

Unless major repairs are made to the property, the house is probably ruined and non inhabitable, drywalls, carpets, wood framing are contaminated, leak, crack in the foundation, structural damage due to illegal electrical system by-pass that many operator use to steal power from the city.
Contamination of soil and water can be affected by a improper chimical disposal.
Honestly I will stay away. Of course, if the price seems the deal of the century, be prepared for sleepless night
and headaches because there is probably more hidden problems that you have anticipated.

If you still want to invest in a grow house this is some of the precaution you need to take:

-Contact a professional scientist inspector.
-Ask for a qualified professional cannabis or meth lab clean up contractor.
-Work with expert to assess the possible structural damage.
-Schedule a inspection with a certified electrician.
-Get all your license in order.
-Don’t forget the air quality assessment.
-ask for quality sample of water and soil assessment.
-Don’t take your health for granted the Hazards mentioned is reel !

Investing in Foreclosure, my number one concern has always been the due on sale clause from the lender.

I recently find out a way to avoid that problem and can sleep better at night instead of trying to refinance as soon as possible, mainly when I get pre-foreclosure properties and “assuming” a 10%-12% interest mortgage.

My last buy was in a very nice and quiet neighborhood in Sevierville, TN.
These owners have tried a business, which, unfortunately, didn’t bring their expectations.
They soon faced hard time to pay bills, mainly the mortgage.

So, with a pre-foreclosure in place, this is how I proceed.
Owners have to provide me with mortgage back payments and all unpaid bills. In this case, they were 4 months behind and didn’t pay their real estate taxes.

Paying the bank will probably bring a red flag somewhere. The big deal is the insurance though, when the insurance company send any change to the lender.
I decided to assume the mortgage and quit claim the property with a “leasing” shield.
So, we decide that the owners will “rent” the property to me and the rent is…the mortgage payment amount.

However, I don’t want to give the payment to the owners, since I can’t put my trust in them regarding money. So, I actually called the bank saying that I was the new tenant, but I wanted to pay them directly, since I know the owners have difficulties to pay and don’t want to live in there for 2-3 months and then, they foreclose and kick me out…They seems to be happy to have the payment instead of foreclose.

We, then, have a “12 months lease”, so I have plenty of time to shop around for refinancing.
I’m just avoiding the “due on sale” clause since it’s rented and not sold, but I’m on the deed since the quit claim.

In terms of mechanics, foreclosure flipping is very similar to regular property flipping. However, there is added risk when dealing with foreclosure flipping because there is often a heightened probability of unforeseen problems that have been cosmetically repaired and possibly hidden trust deeds that encumber a property. In addition, people who lose their homes to foreclosure sometimes do damage to a property out of frustration at having lost their home.

Buyers need to be particularly aware that fixes to the property could be cosmetic in nature where mechanical or structural problems could be present. These problems tend to show up after the home has closed escrow and the seller of the flipped property has moved on to another area, possibly out of state. In those circumstances, it is highly probable that the buyer will not be able to re-coup the losses they sustained. The key message is to know what you are getting into in terms of value, risk and unseen problems that property inspectors may uncover. Get the third party information you need about market values and risks.

Pre-foreclosure flippers identify properties targeted for foreclosure usually because of a Notice of Default (on payments) that has been filed by a lender, due to non-payment of the mortgage. They want to be involved early in the foreclosure process because they want a “good deal” and do not want a real estate agent involved, usually because of the added commission expense.

They generally offer the minimum amount possible to a distressed seller to get them out of the property. The offer will generally be just enough to get them out of the property (to protect their credit rating) and perhaps a few more thousand dollars so they leave the property with something. The market value of the property may be, and often is, considerably more than the pre-foreclosure flippers will offer. They understand the sellers in this situation are often desperate and they take advantage of that situation. Their objective is profit and their goal is to buy the home with minimal up front expenses.

If owners find themselves in this type of situation, they should first contact their mortgage lender to see if there is a way to “work out” of the situation. If so, such terms should be discussed, as lenders are not usually excited about the foreclosure process. If a buyer has consistently paid their mortgage and has run into short-term problems, lenders will sometimes help them work through the problem.

If that’s not possible, the owner should consult with a local real estate professional (a broker or agent) familiar with the market to discuss listing the property and develop a specific plan of marketing and sale of the property. If there is enough equity, a broker can help expose the property to market very quickly. If a full service broker costs too much, there are several notable discount brokers that may be able to help. If you are in this situation, understand that a pre-foreclosure flipper may be a solution for you but that there are other means of addressing your situation.

Source Cody Thomas

You probably have heard that some time people purchase, renovate and sell houses for profit, known as house flipping. It was a real buzzword in real estate before the recession. There is no magical formula to ensure success at flipping houses. However, there are essential tips to help investors earn more money.

1. Do not get emotional when buying a house that you are going to flip. It is after all a business. If the numbers do not work, proceed to the next property. Some investors make the mistake of being too attached to the flip that they sell at a high price and end up holding the flip longer thusly reducing the profit.

2. First impressions count. Pay attention not only to the inside of the house but the outside as well. You cannot show off all the upgrades done inside the house if potential buyers are turned off by the outside appearance of the house and its surroundings.

3. Personal tastes are a no-no in a flipped property. Your flip needs to be attractive to buyers, not you. You should define who your target buyer is and what is his/her preferences. Color is a vital part of flipping houses. Stick to neutral colors especially when it comes to painting and laying the carpet.

4.Kitchens and Bathrooms sell houses. Spruce up the kitchens and the bathrooms and they will noticeably increment the value of the property. But be sure that fixtures and appliances match the target price range. If the kitchen and bathrooms are spotless, sleek and updated, the house will sell faster and for a higher profit.

5. In house flipping, time is money. After making a detailed list of renovations to be done, establish a timeline. A timeline is an important way to let contractors know when the next group of workers needs to be in a specific part of the house. One rule of thumb is to work from top to bottom and tackle the big work projects first.

6. Hire a contractor you can trust. You cannot be at the job site all the time. This is where the contractor comes in handy. He can keep a close watch on your time line and also the part of the budget that is his responsibility. He can keep track of problems and readily find solutions. The easiest way to find a good contractor is through referrals.

7. Be ready for paperwork. There are loads of paperwork that come with house flipping. The most important paperwork you will have to attend to are permits. It takes time to obtain permits so you need to apply for them before work begins. Not having the necessary permits can cause work stoppage and this cost money. Contracts and receipts are doubly important. Be sure to keep them. You also need to obtain insurance coverage not only on the property but the workers as well.

8. Keep track of your progress. Throughout the entire house flipping process, you have to constantly monitor your progress. That way, you will know at any given time where you stand on the project. This will help you keep focused. Time is of the essence in house flipping.

9. Start small or simply, and then work your way up. Your first house flipping project should only entail cosmetic work. You may not get a huge return on your investment but you will surely learn valuable lessons and develop experience.

10. As with any business venture, expect the unexpected. You will certainly encounter something that you simply did not expect. It may be a problem that appears hours before the transfer of ownership. You will almost always run at least a little over budget or hold the flip a little longer than expected.

By cody Thomas

Another successful way to make money is to buy a Pre-foreclosure.

The upside of buying a defaulted property from homeowners can be perceive as a help, the troubled homeowner and lender
will lose if the property is foreclosed. Neither of them want it to happen. Therefore they’re anxious to resolve the situation.
That make them the very motivated and motivated is the keyword!

The return can be as high as 40%.
First, look for defaulted loans you will access these informations on a tax roll or to the county courthouse of the property location in the newspaper or though a foreclosure service.
You usually will be dealing with the property owner, determine the value of the home  with a CMA (Comparatif Market Analysis).
Assess the cost of the repairs. Keep in mind the objectif “make money fast” don’t spend to much time and money on repairs
fix it fast then is time to put the property on the market as a quick sale.

Let’s summarized the basic steps to assure a successful purchase and sale:

1. Locate loans in default.
2. Narrow your options and selections.
3. Contact homeowner.
4. Inspect property and loan documents.
5. Determine homeowner’s motivations.
6. Determine the value of the property and profits.
7. Negotiate with owner, lender and lien holders.
8. Close the deal, repair as necessary, stage the property and sell.