People want to have their own house.  It is a common aspiration.  But in today’s extremely tight credit market (think US financial bailout), a potential home buyer may not be able to obtain financing from a traditional bank or a mortgage company.  In this case, a buyer may choose to purchase real property through a land contract.

A land contract sometimes known as a “contract for deed”, “trust deed” or an “installment sale agreement” is a contract between a buyer and a seller of a real property wherein the seller provides financing to purchase the property for an agreed-upon purchase price and the buyer repays the “loan” in installments.  The seller holds the title or the deed to the property until the buyer completes all payments stated in the contract.

Purchasing a property by way of a land contract can prove beneficial to the buyer.  He/She does not have to contend with hefty down payments, credit requirements or other tedious bank financing prerequisites.  Initial costs incurred with a land contract are also significantly lower than those through bank financing.  Likewise, the seller does not have to wait for lengthy bank processes.  Furthermore, property sold via a land contract can be priced higher than if sold through bank financing.  Since the buyer is not obligated to pay a large down payment, the seller can ask for a higher price or a higher interest rate enabling the latter to realize a considerable profit.

Under a land contract, the buyer and the seller enter into an agreement that stipulates that the seller shall only transfer the legal title of the real property until all agreed-upon payments have been paid in full.  During the duration of the contract, the seller allows the buyer to occupy/use the property for purposes other than legal ownership provided the buyer is not in default.  In most land contracts, the purchase price is typically paid with a modest down payment and then periodic installments for a set period of time.  At the end of the course of the payments, the buyer pays off the balance with a balloon or lump sum payment.  When the full purchase price inclusive of any interest has been paid, the seller tenders the legal title to the property to the buyer. 

If the buyer defaults on his/her regular installment payments or fails to make full payment at the end of the land contract, the seller may re-possess the property.  The buyer loses any payments made including the down payment and equity through his/her periodic payments.  Money and time spent on improvements on the property will all go to waste.  Thereafter, the seller is not required to transfer the deed to the buyer.

On the other hand, if the seller owes a mortgage on the property and has not settled the entire loan prior to the buyer’s final payment at the end of the contract, the latter may be forced to pay off the mortgage to prevent foreclosure on the property thereby losing his investment.  Aside from mortgage on the property, there can also be back taxes or other liens that the seller owes. 

The American Sunshine State of Florida has always been one of the favourite destinations for travellers around the world. The alluring tropical weather, pristine beaches, and inviting landmarks in the State are too good to resist for the locals and the visitors alike. The relaxing lifestyle of Florida’s coastal culture adds to the charm of a retired life the Brits yearn for during their entire youthful life. Due to diverse hotspots, Florida is not just popular with the retired brigade, but also with the kids and youth alike.

What Makes Florida a Hot Investment Destination? Florida could be termed as the southernmost State of the United States of America. Surrounded by Sea and Ocean, Florida is every bit a coastal State that has natural richness of beauty and some scenic glory. Florida beckons with hundreds of pristine sandy beaches lined with towering palm trees and affording the best environs to relax your woes away. With year-round tropical sun warming the Floridan air, the weather in Florida presents the best of America to the world, and is a major reason for property investment in Florida.

It’s not only the weather that gravitates people from all over the world towards Florida, but the overall living standards enhanced by the recreational facilities in the State and its vicinity that are the USP of Florida. The State is home to the world famous Disneyland or Walt Disney Resort in Orlando – a favourite among children and adults alike. Besides, you get to enjoy a plethora of activities in Florida, like golfing, fishing, dining and theatre etc.

Florida is the fourth most populous State of the USA and home to nearly 16 million residents. The ever-increasing popularity of Florida as a dream destination for first and second homes is further contributing to the riches of this giant peninsular State.

Florida is not a single-community State. Thanks to its all-round beauty and better standards of living, the State attracts people from all around the world and this makes Florida a truly multicultural paradise on Earth. Further, Florida boasts of different kinds of lifestyles in different regions. For instance, the coastal lifestyle may not be the same as that of Central Florida. The Gulf Coast towns and cities are known for being more relaxed, while the East Coast of Florida is a little more fast-paced.

Florida is flocked by tourists all the year round, which makes the demand for property – both rental and disposable – in constant demand. You can easily earn regular rental income or just stay during holidays or permanently make Florida your next permanent destination.

Florida is very well connected both within and outside the country with regular flights to and from the State. With an elaborate road and rail network to support the airways, you can look forward to easy accessibility to the Florida state.

The availability of different kinds of properties to suit every kind of taste and preference is another important factor that works in favour of Florida real estate investment.

Though the legal process governing the real estate transactions in Florida is a little tedious and cumbersome, every effort is worth the time and energies spent, as you’d hardly find a place under the Sun that is so perfect in terms of living standards. Moreover, if you are prepared to hire an attorney for all the documentary spadework and other tax hassles related to owning a property in Florida, chances are that you won’t be troubled by all the legal formalities.

Hottest Investment Destinations in Florida You can easily find different properties for sale all around Florida. However, there are certain regions and cities that are more preferred by investors for obvious reasons.

For those seeking out a flurry of tourism-related activities around, the town of Kissimmee offers the best bet. Situated in Osceola County, Kissimmee’s close proximity to the Disney World makes it a real estate magnet in the region. Property in Kissimmee has a rich heritage and an enviable landscape with close proximity to some of the world’s premier holiday attractions. The town is within eighteen miles of Orlando and is ideally located to go further west and explore the golden beaches of Clearwater or the Space Coast to the east.

Miami is every bit a modern city with a vibrant lifestyle, world-class hotels and restaurants, some fabulous beaches and a buzzing nightlife. If you want the real thrill of Miami, don’t forget to invest in the beachfront property here, which range from villas to apartments to nice residential homes.

Tampa and Orlando are other big cities in Florida that are always in the pink for the real estate investors. The cities offer choicest options for some great rental income from apartments, villas, luxury, and holiday homes. Orlando’s world famous theme parks have a unique charm of their own that is so very irresistible for the adventurous Brits.

In all, Florida is a combination of everything you want irrespective of the kind of lifestyle you are looking for. From relaxed to adventurous to youthful to exuberant to childish, you can enjoy almost every activity under the Sun.

An REO is real estate owned by the bank, and many investors consider an REO property to be money just waiting to happen. An REO is different from a foreclosure property in that the bank has already tried to sell it at a foreclosure auction and has had no luck getting bids. Because the property was not bid on, the bank then became the owner of the property. Naturally, the bank does not want to keep the REO any longer than possible, and this makes it a great opportunity for an investor. Not every REO is a good deal, but when you look at an REO you’ll commonly find that there is a lot of money to be made.

So, is this a foreclosure?

Technically speaking, the home was foreclosed on because the owner of the home failed to make their scheduled payments. The bank set up and went through a public auction, but there was not any bids placed on the home, so the bank ended up owing the property. Yes, the home was foreclosed on, but it is well past the foreclosure process and the bank will be anxious to get rid of the property.

Advantages of REO vs. Foreclosed Property

When you are thinking of buying an REO you have to distinct advantages that a buyer does not have with a foreclosed property. The first is that you are able to buy on your schedule, as you do not have an auction date to work with and around. You can make an offer of the home any time; you don’t have to wait for bidding to begin. Another big advantage of an REO compared to a foreclosed property is that you can inspect it before you buy, when you cannot do this with the majority of foreclosed homes that you think about purchasing. Being able to inspect the property before you buy will let you know how big of a project you will be dealing with.

Best types of REO to purchase

You might not think the type of loan the home was purchased with the first time around matters but it does. You should attempt to purchase REO’s that had a conventional loan the first time around, as you will likely get much better deals with these than you will if you look at FHA and VA loans. The federal government backs FHA and VA loans, and the government can actually buy them back if they are so inclined. Homes that had conventional loans the first time are often purchased for just a fraction of their value, meaning that they can make an investor a lot more money.

Which REO’s you should not purchase

Just because the bank owns a property does not make it a good deal. In fact, when you see that a home or property is an REO you have to wonder exactly what IS wrong with it. The house was not bid on because no one saw the worth in it. Did the home just not have enough equity? Were their IRS liens against it? Was the property just too badly damaged? You need to ask these questions. If the bank cannot answer the questions then you need to be even more skeptical. Take advantage of your right to inspect the REO so that you can see with your own eyes what may or may not be wrong, hire professionals if necessary as well.

One must also be sure that if they are purchasing an REO to fix it up and sell it, that the property is located in a desirable part of town. If the home is not located in a desirable part of town, you should really think about how wise of an investment the property may be. Perhaps location is why the property was not bid on at auction. There are three big things to consider when dealing with any type of real estate and those are location, location, location. Never let a seemingly good deal let you lose sight of how important location is for any piece of real estate that you intend to sell.

Why the bank will sell an REO cheap

Basically, a bank is not set up to deal with real estate. Sure, they give loans to people, but really, they are not equipped to buy and sell real estate. Because banks are not accustomed to dealing with real estate, it often takes them awhile to get the ball rolling so that they can repair the property, and get an agent to sell the property. What this means is that while the bank attempts to get their business together they are losing money hand over fist and the federal government often penalizes them for each and every REO that they acquire.

Because the bank is loosing so much money on each REO, they are willing to sell it fast and cheap. In fact, banks commonly sell an REO property for around 30% of its value just to be done with it. Sure, they end up losing money on the deal, but they end up losing less if they sell cheap now than they would if they kept the property for another six months while they try to pull everything together so that they can sell the property.

The great thing about working with the bank with an REO is that you aren’t buying site unseen. Because you can walk through the house and make all the inspections that you want, you can deal with them in a way that will give you the best deal, and the bank will typically be happy with any serious offer because it will get the house off of their hand and they will stop losing money.

Generally REOs are a great investment as long as you know what you are getting into. The bank simply wants to get rid of these homes, and if you find the right property and are ready to make the serious investment, it can be a great way to get off and running in the real estate business.