So, investing in foreclosure real estate at the present moment could not be better for the beginner or for the pro. But before you jump right in there you should be armed with the basic knowledge of how things work or even employ the guidance of a professional mentor. Some of the things you should be asking yourself are, is the property in the right location? Does it need major repairs and the cost of those repairs? Am I getting below market value as its all about making a profit?
Gaining An Edge
Armed with the knowledge of the subject and with a good Realtor who can keep you up to date with new listings, and also having your finances in order will keep you one step ahead of the opposition ready to grab anything that you think will make you a profit.
Three Routes You Can Take For Purchase.
The first of these options is to go directly to the homeowner before the mortgage is in total foreclosure by the bank. This method is known as pre-foreclosure. Another method is to go through real estate auctions, this is where the buyer places a bid against other investors. Last but not least is buying the property through the a Realtor.
Pre-foreclosures is a good option when buying directly from the home owner especially when there is equity within the property. It is important for you to have all the mortgage details which are remaining on the property, as once the deeds are handed over to you, you are now responsible for any mortgage payments which are due or behind.
Next is buying property at auction. Within different states there are different rules you have to abide by, so you should always read the small print because the last thing you want is to be caught out. With this method carries the greatest risk but, you know the old saying, it also can give you the biggest reward. Sometimes it can be anything between 40%-60% to the winning bidder. The risks with this method are 1. that an inspection of the property may not be possible until after the auction or, 2. you might have to pay cash up front for the purchase. Even worse, you might have tenants still living in the property.
The last option is, you can go to the real estate company and buy from them. This carries the least risk because it gives you more time to access the properties condition, set up your finances and gain more knowledge about the property. The down side is you would probably not gain as much financially.
One last tip is look out for Real Estate Owned (REO) foreclosures as this basically means that the bank foreclosed on the property and they now own it. This is where the money can be made, as I said before the banks do not want to sit with loads of properties, they our happy with breaking even on most occasions.
So from the methods above I hope you will find one that suits your personality and your needs and I wish you the greatest success.
Derren Welsh writes on marketing and business related issues. You can learn more by visiting my blog. Free Foreclosure Listings.
http://dazz-free-foreclosure-listings.blogspot.com