Foreclosure Investing

Tips for making money off the foreclosure market

Foreclosure Investing

• Foreclosed homes can be purchased for up to 60 percent below their market value. With some modifications, these homes can be resold for near, or at, market value, giving you a sizable profit.

• Even more profits can be made by buying distressed properties in need of repair, fixing them up and selling them back into the real estate market.

Foreclosure Investing

• Foreclosure Investing is an easy way to make thousands of dollars fast.

• Investors who are particularly handy can make a lot of money by buying, repairing and reselling fixer upper homes. Even investors with little to no experience in home repair stand to make big bucks.

• The key to making money through home investing can be achieved by following some basic steps.

Tip 1: Pre-Qualify for a Loan

• Unless you plan on buying foreclosures entirely in cash, you will likely need to take out a home loan to afford a foreclosed property.

• If you are able to pre-qualify for a loan, it greatly improves your chances of making a successful bid.

• In a judicial foreclosure state where a lis pendens is involved, you may be required to prove your ability to pay before the sale can be finalized.

Tip 2: Research Neighborhoods

• Many foreclosure investors assume that it’s best to buy the nicest house in a bad neighborhood. This is a huge mistake because the poor quality of the surrounding homes will drive down the value of the property.

• Meanwhile, buying the worst home in a nice neighborhood will bring up the value. Once you’ve renovated the property, the value will only continue to increase.

Tip 3: Research Foreclosures

• If you plan to buy auction homes, attend an auction as a spectator first so you know what to expect.

• If you plan to buy REO properties, form a relationship with lenders that list REOs.

• If you plan to buy foreclosure short sales, contact the homeowner and/or seller named in each listing to ask questions about the property.

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• Try to pre-qualify for a home loan to increase your chances of making a successful bid on a property.

• Research foreclosures and the value of the homes in the surrounding neighborhood.

• Learn local foreclosure laws and become familiar with foreclosure buying methods.

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