Getting A Good Deal On Foreclosures are the emerging new market that people in the country are increasingly investing in. This market promises high returns at significantly low costs. It is for this reason that new investors find themselves attracted to this lucrative field. Foreclosures, however, are not everyone’s cup of tea. Experts hold the view that more experienced buyers are bound to have a higher rate of earnings in foreclosure investments than beginner or intermediate buyers.
With information overload caused by the internet and many advisors, the fundamental steps to invest in foreclosures is still unknown to many.
Investors still ask a common question:-
What Are The Key Steps To Getting A Good Deal On Foreclosures?
Getting a good deal can be boiled down to 3 simple steps:
- Doing Your Own Research
It is imperative to conduct research. While investing, it is important to have as much information as you can about a property. You should also know more than what your competitor does. Fundamental information such as condition of the property, clean title, city liens, potential legal issues, occupied or vacant, and the like, hold the power to make or break a deal.
- Knowing Your Market
People who are better informed about the area and the market often get the best deals. Paying attention to specific details and gaining insight into the property will go a long way in helping you have an edge over competitors.
- Making A Smart Bid
Bidding correctly means that, a lot of times, you do not get numerous properties that you bid on. This should not affect your strategy. Bidding appropriately can get you properties at discounts close to almost 50%, even though you may win the bid on only 10-15% of the contentions.
These are the 3 essentials to be remembered while investing in foreclosures.
The strategies used by different investors, however, may be distinctly different from the other. When classified broadly, there are 3 common Foreclosure Investment Strategies:-
- Auction
This involves going to actual auctions and bidding for properties.
Advantages:
- Getting properties lower than market value
- Insight into foreclosures investment market
- Not too much competition
Disadvantages:
- Excessive research on the property and cancellation/continuation of the auction
- Lack of control on the condition of the property
- Requirement of down payment and payment of balance within 24 hours
- Birddog
This involves directly approaching the owner of a foreclosed home for negotiation of a deal.
Advantages:
- Availability of numerous properties at this foreclosure stage
- Familiarization with the condition of a property in case of auction
Disadvantages:
- The stress of approaching a financially distressed stranger
- Repeated rejection, in almost 90% of the cases
- Organized Birddog
This uses a combination of communication techniques such as phone calls, mass mailings, etc. along with the traditional birddog.
Advantages:
- Increased chances of negotiation through constant communication with owner
- Multiple communication methods reduce stress of rejection
Disadvantages:
- Requires constant follow up
- Requires personalization of every message sent out
