Buying foreclosures?
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I have bought a number of foreclosed properties over the last 20 years. I must tell you, I am changing my approach.
Because of easy financing, and constantly rising prices, I would purchase almost any foreclosure I could and flip it, sell it quickly, after a little cleanup and repair. Now, I think that approach is doomed. The financial market is in chaos and financing is tough, it is a buyers market and properties for sale don't sell fast because it is so hard for buyers to get financing. In many places housing prices are going down.
So I am being more choosy in my selections and more conservative in my financing. Instead of looking for selling quick, I am looking for repairing them into a good rental condition and renting them out (all those families that are foreclosed on have to live somewhere right?). I'm going to keep them for 2-5 years before selling them, after this current correction is over.
I used this approach in the mid-1980s and again in 1999/2001 because of sluggish home sales and it worked well each time.
I am also changing from doing most of my transactions alone, to doing them with partners. That way my investment money goes farther, and we spread the risk out so that if there is a glitch, we won't be forced to sell at a loss if we have more expenses or a longer time required to invest to get our profits out. With partners, I can also take advantage of investing in some of the best foreclosure areas, and not just in a local market.
Hope this helps
Not many people do. Mainly because they aren't educated on the in's and out's of buying such properties. That is why using a Realtor that is knowledgeable in those types of properties can be invaluable! Not to mention their services are free to buyers!
I have a friend that bought one. They saved on the purchase price of the property but had to spend the savings on the remodel. The house was in near ruin. The wiring had been yanked out, the plumbing, fixtures. If it wasn't nailed down, and in some cases if it WAS nailed down, it was taken. They ended up with a nice place because her husband worked for months to restore it. If you are a carpenter it might be a good idea, if you are thinking of doing it for an investment, be prepared to have enough cash for all of the remodeling needed to get it back on the market. Good luck :)
It is very important to do your due diligence when purchasing a foreclosure. If you have the right contractor and get the right deal, you can make some money out of purchasing foreclosures. I personally don't invest in these types of properties...Tax lien certificates are probably a much safer and secure investment.
Hope this helps...
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I have had good luck buying a couple homes from http://www.emailforeclosures.com...
It is free, and I get them fast as usually in my area there are multiple offers. The market is changing, though, so you might want to wait a little while.
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