By John Marsett
Have you ever been up late at night and seen one of the infomercials about buying foreclosed homes cheap? This is supposed to be a huge secret of course (at least according to the infomercial), but they are many going to sell you the secret on foreclosures. If you follow their advice all you need to do is find out when foreclosed homes are going up for auction and go to bid on the home of your dreams.
Well, this really isn't too far from the truth... except you won’t always find great deals on at the auctions. Here is something you need to keep in mind - if you are willing to buy a home in a less than ideal place, you may be able to get a house for a steal. This doesn't mean that there aren't nice homes in nice neighborhoods that are going through foreclosure, they are just not as common.
The best advice is to take time to learn. Go to the auctions and speak with those who are regularly buying foreclosed homes. Most of the ones they buy for little to no money were in badly need of repairs, and are located in not so perfect neighborhoods. The location alone might make it almost impossible to resell, even
if your home is great. Another issue is that foreclosed homes may have mold problems.
There are foreclosed homes of all types for sale in all price ranges, but you probably aren’t going to get that great house on the lake for a steal. Most experts will tell you it is best to buy something in a decent neighborhood that you can resell for a profit (or flip) after the cost of purchase and repairs. You will have to keep going to different auctions before you find something that you like, and even then you may not be the winning bidder. You must be patient.
If you are really set on pursing the world of foreclosed homes, by attending the auctions you will come across bankers, other real estate investors, and even some real estate agents. Take them out to lunch and become friends. Sooner or later you will begin to get the inside scoop on forclosures. Buying on the inside, before the house ever gets to auction, is where the real bargains and dream homes come from. In fact, that is how my in-laws found their home. Through a connection at church they bought a home that was foreclosed, and they couldn't be happier.
John is a real estate investor and has helped many individuals get into their first home. He has helped people through lease options and finding qualified lending through mortgage brokers.
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