Check Out Our List of Foreclosure Auctions

Everyone wants to know how to buy foreclosures these days. Every single day the news headlines include some article about foreclosures. All the experts are running around touting how easy it is to strike it rich with foreclosure properties. Yes there are opportunities. Yes it is possible to make some good money. Are you going to be an instant success? No! As with any endeavor, investing in foreclosures takes time effort and money. Maybe not your own money, but someone’s money will be needed. This article is going to explain some of the potential problems as well as a few of the very important items to look at before bidding on a foreclosure.

Know the market that the property is located in. Talk to real estate agents, get comps, find out how much inventory is on the market and take a good look at the neighborhood. If it is going to be a rental, do a market survey so you know what to expect in terms of rent rates.

Check Out Our List of Foreclosure Auctions

You need cash in hand to bid at a foreclosure auction. The person running the auction is going to want to see your cash or cashiers check in order verify your bidding limit. So you either have to have your own money or a partner who is willing to put up the money.

You would be well advised to either research the title of the property yourself or pay a title company to do it for you. You want to know exactly what you are bidding on. What liens, mortgages and other items might affect the title to the property. Without this information you could be bidding on something that has no profit potential or even worse, could be a money loser right from the start.

Most often you won’t have the opportunity to inspect a property prior to purchasing at the auction. Owners going through foreclosure are not the easiest people to work with - for obvious reasons. Plan for the worst possible scenario. The property could potentially need tens of thousands of dollars worth of repair work. You won’t know until you get inside.

Check Out Our List of Foreclosure Auctions

Before you buy the property have a plan in place outlining what you are going to do with it. Are you going to live in it? Flip it to someone else? Fix and keep it for a rental? Do you want be a landlord? If not, do you have a property manager in mind? Formulate your exit strategy!

Once you have bought the property at auction you may have instant tenants via the prior owners. You may have to go through an eviction process to get them out. Have your plan in place and be ready to execute it. The sooner you can take possession of the property the better. You might try offering the prior owners a few bucks and renting them a moving van. In my experience this can be much cheaper than evicting someone and taking the chance that they will damage the house on their way out.

Check Out Our List of Foreclosure Auctions

There are going to be some issues when investing in foreclosures. Preparing yourself beforehand will make the process go smoother.