Can you buy houses for pennies on the dollar?...

The short answer is yes, but it’s not that easy. Most real estate bottom feeders seek out homeowners that are losing their property as a result of mortgage foreclosure. This used to be the treasure chest of real estate bargains. It’s different now. Many of these properties are over financed or they were purchased at the top of the market and they have no equity.

Never lose sight of the fact that when we’re talking pennies on the dollar, we’re really talking about equity. And that means equity in the current market, not at the height of real estate boom a few years ago.

Today’s bargains are being found in short sales, REO properties, or homeowners that have real equity and have a greater need for their money today. That is, they want the convenience of a fast sale in order to move on with their lives.

Today’s investor or wanna-be homeowner would be well served to work with real estate agents and use the shot gun approach to buying property. That is, make an offer on multiple properties at prices that will afford you a profit in today’s market. This is easy enough to do by contacting realtors in your local market that work with short sales and REO properties held by a lender.

An REO property is a property that has been foreclosed on by a lender and they now hold the property in their portfolio. Most lenders have an abundance of these properties and are aggressive to liquidate them. Never be ashamed to low ball your offers because if you’re going to buy it, buy it right. Your profit should always be calculated up front when acquiring a property.

Over the years, I’ve found that one of the best opportunities is to find property where the owners have equity and didn’t do much to get it. These are properties that have been inherited. That is, someone died that owned the property and it is transferred to their designee by will or intestate. These new owners have just received a windfall and didn’t do anything to earn it in most cases.

These are a good bet for an opportunity and can be found in the Probate section of your local court house. Recently, I acquired a property that went through probate and was able to negotiate a sales price of $50, 000. After a rehab of $15,000 we sold the property within 30 days for $115,000. Can it be done? You betcha.