Real Estate investing with foreclosures can be an exceptional method of making money in the real estate market. You can usually get a foreclosed house for a below market value. The reason is the bank is not looking to hold on to real estate. They are looking to unload it. And the best and fastest way is to unload it for below market.
Now, with that said, it is foreclosed for a reason. Sometimes it happens to be a situation where the family can no longer afford it, and the bank forecloses on them. But more often than not, the family has totally trashed the house. The carpet will need replacing; the walls fixed, and repainted, the ceiling repainted, and the entire house scrubbed down. This was the case when I bought my first foreclosed house.
The foreclosed house we bought needed some repair. Most of the potential buyers could not get past the odor when they opened up the front door. See, the previous owners let their dogs run wild in the house, and even kept them in the house for 4 weeks when they went on vacation. So, you can imagine the smell. But we looked past it.
The house needed work, but we got it for $30,000 below market. We then used the money saved on the purchase, and took out a construction loan for the original amount plus the extra money to get it to market value. We put in 4 weeks of solid working on it, but when we were done, we had a brand new house with all new products inside.
We only stayed there for 2 years before deciding to move. When we sold, we made a 25% gain on the house, all because we were willing to put in a little sweat equity. It is not easy, but it is well worth it in the long run. I would definite recommend real estate investing with foreclosures.
Michael Baker is has bought foreclosed properties, fixed them up, and sold them for profits. He now is the owner of Real Estate Investing With Foreclosures website.