Can you make a quick buck by investing in real estate that is in foreclosure? Even as the economy begins to pick up, you have to be careful. Those who know how to invest in real estate understand buying real estate in foreclosure does not mean that you will pay just pennies on the dollar for the property, even though you might have heard such stories from the friend of a friend of a friend. Often foreclosed properties go for just five percent below their true market value.
Don?t get discouraged. As you learn how to how to invest in real-estate you will find you can still make money at buying foreclosed properties if you have time, patience, and some extra cash. Five percent still represents a lot of money when you?re talking about the cost of a home.
First of all, track down your own prospective properties. You don?t need to pay a listing service for information on foreclosures in the area of interest. Go to your local bank-especially if you have already established yourself as a customer there. Ask if there is an REO (real estate owned) officer at the bank who can give you their current list.
Some banks list such properties on their website, but many are pretty discrete. One bank lists them through a link in the website?s FAQ. With other banks, try entering ?real estate owned? or ?(name of bank) residential properties? in the website?s search bar. You can also call your local real estate agencies and ask for an agent that handles REO listings.
As you learn how to invest in real estate you will find it is probably best to not bother visiting courthouse auctions. Those properties in many cases have not been inspected yet. There can still be outstanding liens. If you buy a home that has already been auctioned and is owned by the bank, liens, taxes have most likely been taken care of and inspections have been done. Foreclosed homes that were previously financed with FHA or VA loans can be found on the government?s website. Visit homesales.gov, or ask at your local real estate office if they have a HUD broker.
Next, toggle over to your county auditor?s website. You can search public records to learn if there are outstanding liens on the properties that interest you. While it?s true that most foreclosed properties offer less risk because the bank has taken care of outstanding taxes or liens, you should still check to be certain.
Never buy a property before the foreclosed-upon owner has completely vacated it. You risk becoming the landlord for this hapless person who is upset because he lost his home, and since he most likely has no money to move you will have to evict him. As you learn how to invest in real estate this is not a lesson to learn the hard way.
Avoid properties that are in neighborhoods on the down-swing. And likewise stay away from homes in neighborhoods with a high number of properties for sale. Home values in these neighborhoods are not likely to appreciate very quickly, which defeats your reason for buying a foreclosed property. Steer clear of pre-construction deals.
You will have to have some ready cash on hand. You will need some of it just to jump through the bank?s hoops during the property negotiation stage. And, because many of these properties came from owners who were suffering financially, their upkeep was often neglected in the year or two before the foreclosure, and they will need a lot of tender loving care that only your money can provide. Prepare yourself by understanding the foreclosure process as it applies to your location, since laws can vary.
To your success as you discover how to invest in real estate!
Click here to learn more real estate investing secrets.
Jeff Divers is the owner and founder of Vivid Properties LLC, a family-owned company providing quality services for your real estate needs.
Source: http://estate.learntrend.net/loan/buying-real-estate-in-foreclosure/
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