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Foreclosures For Profit
by Jim Evans

What are the most important factors when it comes to buying a foreclosure? Most investors would agree that the price of the property would be the first criteria that decides on paper if the property should be purchased. Here are several other important factors to consider before you decide which property to bid on.

1. Before you start the search for potential investment properties consider the area that you would like the property to be located. A quick search of nearby neighborhoods or areas that consistently hold their relative values could be very important factors if the real estate market continues to slide a bit. Obviously you are limited by what you are willing to bid on a property, but often by doing a little bit of research you can find a property in an area that is convenient and in a nice area. Depending on your strategy and how much you are hands on in dealing with the fix up of your investment you might be much better off bidding a little bit more for a property that is close to the area that you live. This is especially true if you decide that you want to rent out the properties and establish cash flow.

2. Now that you have know the areas that you would like to buy in it is time to start the search. There are many online property foreclosure auctions sites that will provide a free foreclosure list based on a zip code. When you enter the zip code of the area that you have decided on, it will pull up a list of all the foreclosures that are scheduled for auction as well as information about the property including price point. Now that you have this information it is helpful if you have a realtor that will do a comparable property analysis. This basically will tell you what the market value of a property is based on square footage and any other factors that might include lot size, swimming pool, garage etc. Once you know what what the properties in the neighborhood are valued at, you can get an idea of what the property you are interested in could sell for completely refurbished.

3. Now comes the truly unique side of buying a foreclosure, the estimate of what it will take to fix up the property. Property that is still in the foreclosure process are usually occupied so you have to have permission to look at the property inside. Usually the owners of the property want nothing to do with people looking at the inside of their house, and they don?t mind telling you. This makes it hard to know what kinds of problems maybe lurking inside. The easiest way to get an idea of the condition of the house is to look at the condition of the house on the outside. Usually (but not always) this is a great indicator of how much work is going to be needed on the inside. Also depending on the style, you can view the condition of one of the most expensive potential repairs on a house, the roof. You can also see if any additional rooms have been added to the house that might not show up in the assessors square footage. By driving the property at least you have an idea of what you might be up against and will be able to rule out properties immediately.

4. When you have sifted through all of this information you should narrow your choice of properties to bid on to your top 5. For the most convenient experience at the auction try to do your research on properties that are all going to be auctioned off by the same trustee on the same date. This will save you from having to bid at multiple auctions during the week. Before you arrive at the auction it is highly recommended that you make sure that the properties that you are bidding on are still scheduled to be sold. Often times foreclosures are extended at the discretion of the trustee and will be rescheduled time and again.

5. You might even get extremely lucky and be the only one at the auction and get your first choice, however if reality intervenes and you get outbid for you property, no problem, that is why you have done the research on several different properties. Also just by being at the auction you will get to meet some of the big foreclosure players in your area. Most of these professional foreclosure buyers will have foreclosure property that they provide to clients to buy from them directly after they add on a fee for their service. This is an excellent way of having access to buying foreclosures without having to go through the auction process.

Buying a foreclosure at auction is made to seem simple, but the reality is unfortunately just plain old fashion hard work. Protecting your capital and making it grow takes a lot of research both at home and out viewing the properties, but it is all well worth the adventure when you successfully bid on your property at the auction!

October 8th, 2010

By Michael Mclaren   One way to buy a property or home is through a foreclosure auction, but there are a few things to careful of before you buy.

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September 23th, 2010

By Stefan Rockhaus  The ownership of the home is transferred to the lender when the person is unable to pay the dues and installments in time. This transfer of ownership to lender is called foreclosure. It can be an ideal investment.

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