Things to Consider before Purchasing Foreclosed Properties

Currently the chief executive officer of Global Capital Advisors LLC, in San Francisco, Kevin Fitzgerald previously held executive positions with U.S. Select Holdings, LLC, and U.S. Advisor, LLC (dba U.S. Advisors, LLC). While at U.S. Advisors, Kevin Fitzgerald gained extensive experience with Section 1031 exchanges and helped the firm acquire $2.4 billion in real estate, including foreclosed properties.

Also known as a real estate owned (REO) property, a foreclosed home is one that has been repossessed by the lender after the borrower/owner defaults on mortgage payments. Although the process for buying an REO home is similar to any other real estate transaction, there are some things you should consider before purchasing this type of property.

First off, unless you are a real estate expert, it is a good idea to find an agent in your area with experience in buying and selling foreclosed homes. He or she can help you find what you are looking for in your market and will provide invaluable assistance during the often complex transactions that come with foreclosure purchases.

Also, while you may be able to get a discount on a foreclosed home, keep in mind that these properties are typically sold as is and sometimes require substantial repairs. For this reason, it is important to assess expected repair costs and figure them into your negotiating price. However, be sure that your offer is still competitive, since a bank is not likely to accept anything less than what it considers a good price.

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The Success of Napa Square

When project developer CDI LLC approached U.S. Advisors in 2006 about developing business and retail space in downtown Napa, California, we agreed to participate in the project, designed to provide upscale shops and places for financial-sector businesses to establish themselves. The project was called Napa Square.

When the recession hit, the plans for Napa Square shifted, but the project itself remained on task. When Napa Square opened in 2009, the participating retailers included more restaurants than upscale boutiques. Gradually, though, other businesses (including a fine arts gallery, a real estate agent, and a high-end cookery store) moved into the square.

In 2010, Napa Square and its creators won a “Top Projects” award from the North Bay Business Journal in the mixed-use category. In an announcement about the prize, the Journal recognized the crucial role of Napa Square’s developers in continuing to invest in Napa’s economic future despite the difficult financial climate that gripped the country during the project’s execution.

About Kevin Fitzgerald

During his tenure as CEO of U.S. Advisors, Mr. Fitzgerald engaged in a number of real estate investment projects and joint ventures, including the creation of Napa Square.