How To Buy Foreclosures

If you are looking for a way to invest in a real estate investment like foreclosures, you came to the right place. Learning what to do and how to do it are very important factors to consider when purchasing an investment like this. There are three different options to consider when purchasing a foreclosure, purchasing the property from the actual owner, bidding on it at a foreclosure auction, or buying it from a lender.

Buying the property from the actual owner is the first option someone might consider when interested in foreclosures. The first course of action for this scenario would be to get in touch with the property's owner. There are lots of different methodologies for getting in touch with the owner. These ways include contacting by visiting in person, by phone, or through the mail. Even though meeting the owner in person or talking to them on the phone sounds like the best options, mailing a letter to the owner is the most appropriate way for evaluating the property's situation. The overall objective of getting in touch with the owner in foreclosure is to have a meeting with them to discuss the problem. At this time, you can discuss how you can help them with their problem and how you can resolve it in way in which you make money.

If the property is not successfully bought from the owner, then the property is sold at a foreclosure auction. Buying a foreclosure from a real estate auction is a totally different ball game because now you have competitors and must have cash in hand to participate. You will also be dealing with people who have experience in this process and who have bought up foreclosed properties this way in the past. Therefore, it is a good idea to befriend someone "who is in the know". You will need to prepare for this type of sale by knowing the total amount the property cost. Buying the property for more than 75% of its fair market value is not a good buy. You want to leave enough room to make a sufficient amount of profit to make your investment worth while.

The last option is to buy straight from the lender. If a property doesn't sell at a foreclosure auction, it then goes back to the lender who has to sell to get it off of their hands. When dealing with the lenders, if the property is less then 75% fair market value, the investor can borrow the entire purchase amount from the lender or go elsewhere if wanted. The only set back when buying a foreclosed home from a lender is that they are usually less negotiable in certain ups and downs in the market. As long as the investor purchases the home at approximately 75% of the fair market value, then you are well on your way to profit from this new investment.