Types of Foreclosure Opportunities

I categorize foreclosures into three areas:

• Terrible Opportunities - where the original amount borrowed (or my estimate of its current balance) is at or above the assessed value.
• Good Opportunities - where the original amount borrowed (or my estimate of its current balance) is close to, but below, assessed value.
• Great Opportunities - where the original amount borrowed (or my estimate of its current balance) is well below the assessed value.

A few observations about the people who may be interested in foreclosure properties:

• Investors who hope to flip foreclosure homes (buy, fix, sell for profit) would likely be interested in the “great opportunities.”
• Buyers looking for a home for themselves would likely be interested in the “good opportunities,” and certainly the “great opportunities” as well.
• I have yet to meet someone who is interested in the “terrible opportunities,” mainly because they aren’t likely to be able to buy them at a reasonable price — the bank will take the houses.

Unfortunately, for those who hope to do well buying a foreclosed home, most foreclosures in this area fall into the “terrible opportunities” category.  For example, yesterday a home on Chestnut Oak Lane was in the Daily News Record with an original loan amount of $343,920 — and an assessed value of $316,700.