It is not unusual in today’s economic times for a person who previously purchased land to lose the land in default proceedings for failure to keep the payments current. When a lender repossesses the land and offers it for sale again, it becomes foreclosed land for sale. Often, the buyer receives an exceptional bargain because the previous owner already has paid in a considerable equity.
In other words, “One man’s loss becomes another man’s gain!”
A landowner might default and lose ownership for many reasons having nothing to do with the property. The owner might have lost his job; maybe there was an illness in the family; perhaps there was a divorce, or even a death. For these reasons, and perhaps others, ownership of the land was lost, yet the land itself represents an excellent value with great future potential. In other words, the owner’s financial situation “went bad,” but the land is still good.
On the other hand, there are situations involving foreclosures where the owner’s financial situation is still good, but the value of the land “went bad.” These scenarios involve developed land that is no longer economical to develop, and the costs make it too excessive to hold.
An ancient book entitled “The Art of War” contains a clause that states, “A good general ponders the dangers inherent in the advantages, and the advantages inherent in the dangers.” Astute real estate investors should analyze both dangers and advantages inherent in the foreclosure business in much the same manner.
The ideal type of foreclosed land for sale—large tracts of cheap rural acreage—presents an exceptional opportunity that should be thoroughly investigated.
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