i recently got subscribed to a magazine that keeps records of foreclosures. i have 500k that i want to put into a project so ive been marketing big time. one of the things i want to start getting into is foreclosures.
what are the things i need to know and how do i become the winner? when i talked to a few of my realtors, they sent me a humungo jumbo list of foreclosures. how do i know which one i want? am i really supposed to run comps on each and every one of them and see which one is good for me?
any tips and tricks?
completely new to foreclosures so anything helps
hook up with someone who is already doing it be a capital partner and have them train you along the way.
Your agent should do a lot more than give you a long list. You should decide on what you are looking for first then your agent will be able to build a specific list based on any parameters that you want. My budget is about 10% of what your is but in my case I am looking for foreclosures and bank owned properties that are under 50K and have 3 bed 2 baths and are in the good school district. This brings the list down to a very manageable size. In the one area I'm looking for there are less than 10. From there I look at actual location I am very familiar with the area that I am investing in so I know what streets are good and what ones have drug issues. By the time I've done this I'm down to 5 or six houses. I then start to look at the numbers. For me price per sq. foot is a quick way to get down to 2 or three houses which you can easily run the numbers on. My agent has search saved on the MLS that will send me an email when a house has a price change or a new house is added. With the very specific parameters this means I get an email or two a week I can evaluate a few properties a week rather quickly and it is good practice and helps me keep a pules on the market. The big takeaway for you here is to decide on what you want to focus on within the foreclosure market. Do you want to invest the whole 500k in one house or do you want 4 $125k houses? Where do you want them? Near elementary schools or a college or downtown? Becoming specific will help you weed though the massive amount of foreclosures.
@John Powell so how do i make sure i win the bid? obvisouly it means bidding higher then someone but am i supposed to have any clue at what they are bidding at?
example : last week an agent brought me to a house that was in foreclosure. i was ready to write up the offer, and then the agent said that someone is buying the house to live in and was paying close to retail. is that a mistake on his part? is that something i can change?
i mainly want to target houses that need a lot of work. is that easy criteria i can set? or am i still going to get 100 houses that i need to look at
LOL, yes, getting an education in RE will only make your life more complicated running all those comps. Just get a good agent, attorney, appraiser, title shop and Realtor, pay them to do the grunt work and just buy some properties. Might get a good rehab guy on board, contractors to fix and flip, get a property manager to lease the places out. If you need to start buying now, just hire experts and don't worry about it.
But, your deals won't be as profitable as if you were to actually do the work yourself, what's your best use of your time? It's usually better to know the industry you invest in, being able to value what you might buy, that generally keeps investors from losing money, but you might rely on others and the law of large numbers. :)
I like @Jay Hinrichs advise. As I'm looking for something like it in Florida.
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