If you stay up late enough, you are bound to see one of the self proclaimed real estate gurus talking about how wonderful foreclosures are. They spout off catch phrases like No money down and Unlimited Income while they talk about the foreclosure market. While there is potential with home foreclosures, are they really as good as the gurus would have you believe?
First of all, you should realize that the gurus paint a very rosy picture when it comes to dealing with foreclosures. It s not nearly as easy as they make it sound. You will have to do some work. You can t just shuffle some papers around and expect the money to come rolling in. You will have to do your homework to find the best deals.
The next thing that you should realize is that there is usually competition out there for the best deals. With all of the attention that the gurus have generated towards foreclosures, they are no longer a well kept secret. Every investor knows about foreclosures and has at least thought about getting involved. Therefore, if you re late getting to the party, you might not be able to get involved. In order to find the best deals, you will have to look in a number of different places.
The first thing that you should do is develop some contacts. Making friends with a good real estate agent will go a long ways towards helping you find the good properties. Most of the best foreclosure deals never even hit the open market. When a house goes into foreclosure, banks sometimes have a few real estate agents that they contact immediately. These real estate agents then have a few investors that they go to first, before the house is officially listed. If you are one of those few investors, you will get a shot at all of the best deals before they are truly available. In this case, the best deals never get past the first ring of investors. This often leaves only the non profitable deals to go onto the MLS.
In addition to befriending a good real estate broker, you will probably want to go straight to the source as well. If you can get in with the foreclosure department of a few different banks, you will also get access to the good deals. Some banks have a big portfolio of foreclosures that they are sitting on. They might have a website or a database that you can check out. This will allow you to find a deal that fits the criteria that you are looking for.
Once you find a good deal, you should act on it quickly. If you are bidding on a house that has been on the market for a long time, you can probably send in a low ball offer and see if it goes through. If it is a new property that you know will go fast, you might want to offer what they are asking for.
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