Buying homes at foreclosure auction can bring about savings and even profits, if you plan to sell the property later on. Some investors earn more then $75K on one transaction or you can buy the property for yourself at big savings. There is no better time to be involved in this kind of business than now. We are in a buyer’s market. With an ever increasing rate of foreclosures, there is an overwhelming number of good deals available. You just need to know how to find them.
Investing in foreclosure bargains is not easy to do; it’s not simply walking over to the courthouse, and forking out some money. The trick is to purchase the property before someone beats you to it. Research is a key factor to being a successful investing in the real estate industry.
- Research While researching a potential foreclosure purchase, you need to find out some valuable information about the property. A good start is determining your budget. And the next important thing is determining the true value of a property. Do not bid more than what your research shows you should pay for the property.
- Value For example, if you research that the value of a property is $250,000, once you deduct your renovation costs (say $30,000), this still leaves some space for profit if you bid at $140,000. Do not forget to calculate in the carrying costs, realtor fees and other expenses as you work out the budget and profitably of the purchase. Investing in foreclosures is about business, you are in it to make money, so make sure that you do your homework.
- Location Location is another key area you should consider when looking for foreclosed property. It must be in a prime area if you expect to resell the place for a profit in a reasonable amount of time. General amenities such as grocery stores, banks, restaurants and other useful businesses should be in the vicinity. Current market conditions play an important factor as well. If the location of foreclosed property is too far from areas of business and employment, buyers might look elsewhere.
Foreclosure listings can help you find properties that are in various states of foreclosure. Having an updated listing will allow you to look into the properties and possibly bid on them before someone else does. There are a growing number of websites that offer listings to homes in foreclosure. Some sites give the basic information free, while most of these charge an access fee to obtain the detailed information such as lenders, default amounts and preliminary dates for auctions. This type of information is vital to the success of purchasing profitable properties. Most of these listings will disclose secondary liens or judgments against the property that need to be resolved.
Wining a property at a foreclosure auction is not easy, but it is not impossible either. Proper and thorough research will go a long way. Set a budget, do your research and if it all works out on paper, then make a bid.