Financing Small Business Loan And Bad Credit Loans

Some individuals and companies focus their investment strategy on purchasing properties that are in some stage of foreclosure. A property is considered in pre-foreclosure when the homeowner has defaulted on their mortgage loan. Formal foreclosure processes vary by state and may be judicial or non-judicial, which affects the length of time the property is in the pre-foreclosure phase. Once the formal foreclosure processes are underway, these properties can be purchased at a public sale, usually called a foreclosure auction or sheriff's sale. If the property does not sell at the public auction, then ownership of the property is returned to the lender.^[6] Properties at this phase are called Real Estate Owned, or REOs.Financing Small Business Loan And Bad Credit Loans

Once a property is sold at the foreclosure auction or as an REO, the lender may keep the proceeds to satisfy their mortgage and any legal costs that they incurred minus the costs of the sale and any outstanding tax obligations.

The foreclosing bank or lending institution has the right to continue to honor tenant leases (if there are a tenants in the property) during the REO phase but usually the bank wants the property vacant in order to sell it more easily.^[7]

Buy, rehab, rent & refinance[edit]

Buy, rehab, rent, refinance (BRRR)^[8] is a real estate investment strategy, used by real estate investors who have experience renovating or rehabbing properties but who want to invest in rental property for consistent cash flow. Some investors add an additional R that stands for Repeat as a way of building a real estate portfolio.Financing Small Business Loan And Bad Credit Loans

A real estate investor purchases an investment property with a depressed value because it needs repairs and/or cosmetic updates. The investor then updates the property, including needed structural repairs to bring a house up to the current code. It often includes cosmetic updates such as new paint, flooring, tile, counter tops, and kitchen appliances. The investor then finds a tenant and becomes a landlord receiving rent, usually on a monthly basis.^[9] The property is then refinanced, typically to a fully amortized 30-year loan.Financing Small Business Loan And Bad Credit Loans