| Buying foreclosures can be profitable. Many people | | | | structural repairs that they did not know about. This |
| have made fortunes doing this. There are several | | | | is much more likely to happen when a home cannot |
| types of foreclosure situations, with the most | | | | be inspected closely prior to purchase. While a |
| common ones being delinquent mortgage payments, | | | | foreclosed home occasionally does not need any |
| tax payments, and homeowner association dues. | | | | repairs, these properties usually do require substantial |
| Tax foreclosure sales are usually conducted by law | | | | cosmetic work to get them into decent shape for |
| enforcement officers (such as a sheriff) or other | | | | marketing. |
| officials of the taxing jurisdiction. Mortgage | | | | A search of public records will also uncover additional |
| foreclosures are typically conducted by a trustee | | | | liens or encumbrances that add to the cost of |
| designated by the mortgagee or lender. These sales | | | | acquiring a property. It is not uncommon for the total |
| take place in a public auction where bidders may | | | | amount of unpaid loans, taxes, and other obligations |
| compete to buy the property. The typical foreclosure | | | | to exceed the market value of the property. It pays |
| sale takes place at a public location, such as a county | | | | to do your homework. |
| court house. | | | | An alternative to buying homes at foreclosure auction |
| A lot more people would bid on foreclosed homes | | | | is buying them prior to foreclosure from the current |
| but for one simple reason: lack of money. The | | | | owner. People facing foreclosure will often be willing |
| foreclosure auction is almost always on a cash-only | | | | to sell at a discounted price to get out from under |
| basis and most people do not have many thousands | | | | the loan. This gives the investor the opportunity to |
| of dollars in discretionary cash on hand. Most banks | | | | closely inspect the home before purchase and to |
| and other lenders are very reluctant to loan money | | | | negotiate a price. |
| to purchase homes at foreclosure auctions. So this | | | | Notices of properties facing foreclosure can be found |
| leaves primarily just people with deep pockets or | | | | at county court houses and often can be obtained |
| who have private partners to do the lion's share of | | | | from lists compiled from those records and sold |
| the bidding. | | | | privately. There are even online web sources of both |
| Foreclosures present an opportunity for the investor | | | | pre-foreclosures and homes already repossessed by |
| who is able to buy low and sell high. They keys are | | | | lenders. |
| knowing the market, an ability to do public records | | | | Before you begin, consider enlisting the help of a |
| research, understanding construction, and knowing | | | | qualified real estate agent. They will typically know |
| what repairs will cost. Many investors have | | | | more about the local market and the complicated |
| discovered to their horror that a home they bought | | | | aspects of real estate than the beginning investor. |
| actually needs many thousands of dollars in major | | | | |