Foreclosure Auctions are a great way to investing in real estate. Foreclosure Auctions take place when the homeowner becomes delinquent on their mortgage, and the property is auctioned off at the public courthouse. As with all real estate investing research is a vital part in learning what to invest, and how foreclosure auctions can gain you a profit.
When a homeowner becomes delinquent on their mortgage payments the lender begins the lengthy foreclosure process. If no attempts are made to reconcile the debt with the lender, then the property is auctioned off at the public courthouse. A single foreclosed property purchased at an auction can easily earn an investor a years worth of investment income. Right now is perhaps the best time in the history of real estate to invest in foreclosures with a record number of foreclosures reported last year. There are plenty of deals available to the general public but the trick is knowing how to find them
Despite what infomercials on television might tell you, investing in foreclosed homes is not as easy as just walking over to the courthouse. There is a lot of homework that needs to be done before a foreclosed home is purchased at auction. The key to successful investing, especially in real estate, is research. What you know can make all of the difference. If you want to be successful with foreclosures you have to be willing to spend some time doing some research
The internet has made performing research of any kind very easy. While researching a foreclosure online you can easily come across all kinds of valuable information. If you are going to be bidding on a property you need to know what the market value of the home is, and there are a number of free online services that allow you to research the market value of a house for free. However, in order to obtain the most reliable data on market values you will need to join a real estate membership site. A membership site will allow you to obtain up-to-date real estate information and foreclosures at a nominal fee.
Foreclosures have a tendency to be in a state of disrepair by the time they reach the auction block. Only a tiny fraction of foreclosed homes that reach the auction block are in move in condition. This means you need to be prepared to estimate renovation costs to the foreclosed property you are looking at. Unfortunately, many states prohibit you to enter a foreclosed home until after the auction is over. If you live in such a state you should consider speaking with a realtor in your area. Chances are a realtor will know someone who was involved in the foreclosure.
With a little research and patience you can easily find foreclosure deals at auction. But if you really want to make a profit with foreclosures you should consider investing in a foreclosure list service. Such a service will provide you with foreclosure deals as they come available and before they reach the auction block. The earlier you buy the property the better.
Resell or Hold?
When deciding whether to sell for a small property or hold on it it, it depends on what financial situation you are in. If you have a cash flow it is highly recommended holding onto the property, eventually the market will go back up. If you are losing vast amounts of money however, short sale and get out of the deal. Look at your financial situation and do what works best for you.
Make Money Renting
Investing in properties is a great long term investment. Instead of selling your house, you may want to have someone rent out your home, which is essence means they are paying your mortgage. Once the housing market goes up again you could have your home appraised and then sell at a higher price than you were once planning on.
Investing During A Recession
Buying Real Estate during a recession may seem like a scary thing to do but it is actually a great investment move. During a recession many homes are being foreclosed or selling at much less than the asking price. If you research why the house is selling, how long it has been on the market, and what the asking price is, you could end up with a great investment during a recession.
