I’ve been interested in REI for a while, and specifically been interested in pre-foreclosure deals.
Right now I’m actually looking to relocate about 25 or so miles away. Buying my own future home would be a good way to learn the process without the added pressure of having to turn the thing over for a profit sometime soon.
Or am I wrong…? I’ve bought property before - this will be the fourth home I’ve bought, so I’m not a total novice to RE. It just seems like this is one way to see if I am cut out to do this as a mode of investment in the future.
So, assuming I’m right that this is a good way to begin, does anyone have any suggestions on how to begin with this? I’ve read a few books, such as Goldmining in forclosure properties by Achenbach, how to buy foreclosed real estate by Dallow and Unlimited Riches by Shemin, but I still feel more than a bit intimidated by it all… I know full well that what I don’t know can and will hurt me.
Any suggestions would be greatly appreciated. I live out in the San Francisco Bay Area, if that makes any difference.
Sorry no one has answered. I am not familar with your market. Are there a lot of foreclosures ? Is it a buyers market or a sellers market? If there are not many foreclosures and a sellers market you may have a hard time finding a good deal. You have to be able to move quickly with preforeclosures and have the cash on hand to bring the loan current. Make sure you get a title search to see that they own the property and have no other liens or judgements. When folks get in trouble they generally owe everybody and have been holding on for months which gives other creditors time to file liens etc.
Remember too that at the sale you will need cash for the entire sales price. This can be difficult to arrange. I have a hard money lender that will help me at the sale but they charge a grant up front to be there with the funds if I am the winner or not. Kind of risky if I only have one deal working and it gets pulled at the last minute or I am outbid.
Make sure too that you know the comps. No since paying more for a house the hard way when the exact house next door may be thousands less with easy financing.
Hope this helps some. Glad to see you are getting edumacated before diving in head first