Can I do Nomad with a foreclosure?
If you've had a foreclosure in the past and you're wanting to get your financial life back in order maybe with Catch Up Nomad, you may be wondering… is it even possible to do Nomad if I had a previous foreclosure on my credit report. The answer to that question is yes… you can do Nomad if you've had a previous foreclosure.
However, doing Nomad after a foreclosure does requires that you do things a little differently since you'll be severely limited in your ability to get loans for a period of time.
To get your first Nomad property, you'll probably do an FHA loan first since they're the easiest to qualify for a loan after a foreclosure. The typical waiting period for doing an FHA loan after a foreclosure is 3 years. So, you'll need to be 3 years after your foreclosure to be able to do your first FHA loan for Nomad.
After your first loan, we often recommend that you do conventional financing with Nomad. With a foreclosure this becomes increasingly more challenging since the waiting period of conventional financing after a foreclosure is 7 years.
There are some creative strategies we can utilize to do a modified version of Nomad after a foreclosure and I will be teaching a class or two and writing a few articles about that in a future update.
Should I buy foreclosures?
For the Nomad model, you can buy a foreclosure property, but it is in no way required. You're presumably looking to buy a foreclosure because you believe you believe you're getting a deal and buying the property at a discount. This may be true for you.
While I did not invent the idea of buying a home as an owner occupant and then converting it to a rental, we did name the process Nomad, did some fancy mathematical modeling of it and created a comprehensive series of classes and resources for Nomads looking to implement the model. In our market in Northern Colorado when we first started about Nomads riding their mammoths from cave to cave acquiring rental properties as they went… foreclosures were extremely scarce and the ones that were for sale, were often not deals at all. So, the Nomad model does not, in any way, require you to be buying foreclosures.
Nomad works even if you buy a property for full retail price. So, it is not required that you limit your property selection to just foreclosures or that you buy foreclosures at all.
Now… if you happen to be in a market where foreclosures are plentiful and there is one that looks like it would be a great Nomad property for you… I approve of you buying a foreclosure in those circumstances.