Real Estate
Today
By Ronn Perea
T
o all Real Estate Investor mentalities out there, take notice of a seemingly current popular
method to acquire properties in today’s REI market is RIGHTS OF REDEMPTION.
What Is RIGHTS OF REDEMPTION ? It is only one of several niches under the umbrella of
niches in the REI practices hand bag. R of R is a lawful practice in only 10 states in the union. New
Mexico is one of them.
How it typically works is: XYZ property has officially been foreclosed and auctioned off. Then
the investor must fiscally dissect these properties. Which houses, office buildings, apartments,
bare land etc have enough spread left after you
calculate the costs. Start from what it was auctioned off for to subtract from what the ultimate re-
tail value is. In the case of houses for example, also calculate in the cost of Rights of Redemption
to original owner. Also cost of repair. Remember 100% of these properties have been neglected for
some time and all will need upgrades for resale. Also calculate in the cost of marketing. Unless you
sell it your self, calculate 6% to hire realtors to sell it. Then there is the cost of Title, another 3%.
What ever is left is the profit margin. Is there enough profit in it for you?
If so, only now starts the work. We are now talking detective work. You must locate the original
mortgage owner. More often enough, they have scattered to the wind. Add in difficulty if the pre-
vious owners were a married couple. Most seem not to be married any longer. You will be amazed
how both will have split to opposite sides of the country. You need both signatures.
Of course not all of the deals are that worst case example.
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Real Estate Today