Real estate investing in foreclosed property can be very lucrative. You could say it was just the same as buying any other kind of property, and you wouldn’t be completely off the mark. But, a foreclosed property almost always has existing loans or liens attached to it. Now, that’s a wrench in the works. But here are a few tips from Jeff Adams, #1 Real Estate Trainer, to ease you into the whole process of Foreclosure investing:
Be Bold
A pre-foreclosure sale is often more lucrative than a buying at a foreclosure auction. Dealing directly with the owner can get you highly profitable deals. The owner will always want to avoid foreclosure because of the credit nightmare that follows. Besides, when you make an offer, you can always bring the existing loans and liens to bear on the bargain.
Even banks are wary of owning real estate properties and would rather have their money returned to them. As an investor, you could be a middleman and help owners settle debts in return for a better deal on the house. Remember to be sensitive to the owner’s plight, and you could get yourself a decent bargain. So be a little bold and walk up to those doors and ring those bells to see if you can’t cut yourself a smooth deal.
Be a Tortoise
Remember the fable about the rabbit and the tortoise. It certainly applies to this situation. Many a time, real estate investors rush in to grab what looks like a great opportunity only to find they’ve bitten off more than they can chew. Although acting quickly is often necessary, haste can lead to a lot of unnecessary complications. In cases where it is possible, try to inspect the property as thoroughly as possible before you commit to it.
In cases where direct inspection is unlikely, roam the neighborhood and talk to people there to get a general idea of the area and the property. Foreclosure properties are often already being rented, which means your newly-bought property may come with a few tenants.
Knowing about that in advance can help you decide how good a real estate investment a particular property is going to be. So, take your time and ensure the value of your investment before you step in for the kill.
Be Professional
Trusting the people, with whom you do business, can often result in reciprocated trust, which is good in the long run. But you need to set your limits. You must be as friendly and open as you can in your dealings while simultaneously staying completely professional. Insist on signing a proper sales contract and getting appropriate inspections done (especially in the case of pre-foreclosure deals).
Employ the services of a title company. Get them to conduct title or lien searches on the property you are considering investing in, to find hidden liens or easements that may cause you a lot of trouble in the future. You can even get all liens on the title of a foreclosed property eliminated by court order. It will take time and quite a bit of money to do so, but it can save you a lot of hassle later on.
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