When a homeowner becomes delinquent on their mortgage payments the lender begins the lengthy foreclosure process.
If no attempts are made to reconcile the debt with the lender, then the property is auctioned off at the public courthouse. A single foreclosed property purchased at an auction can easily earn an investor a years worth of investment income. Right now is perhaps the best time in the history of real estate to invest in foreclosures with a record number of foreclosures reported last year. There are plenty of deals available to the general public but the trick is knowing how to find them.
Despite what infomercials on television might tell you, investing in foreclosed homes is not as easy as just walking over to the courthouse. There is a lot of homework that needs to be done before a foreclosed home is purchased at auction. The key to successful investing, especially in real estate, is research. What you know can make all of the difference. If you want to be successful with foreclosures you have to be willing to spend some time doing some research.
The internet has made performing research of any kind very easy. While researching a foreclosure online you can easily come across all kinds of valuable information. If you are going to be bidding on a property you need to know what the market value of the home is, and there are a number of free online services that allow you to research the market value of a house for free. However, in order to obtain the most reliable data on market values you will need to join a real estate membership site. A membership site will allow you to obtain up-to-date real estate information and foreclosures at a nominal fee.
Foreclosures have a tendency to be in a state of disrepair by the time they reach the auction block. Only a tiny fraction of foreclosed homes that reach the auction block are in move in condition. This means you need to be prepared to estimate renovation costs to the foreclosed property you are looking at. Unfortunately, many states prohibit you to enter a foreclosed home until after the auction is over. If you live in such a state you should consider speaking with a realtor in your area. Chances are a realtor will know someone who was involved in the foreclosure.
With a little research and patience you can easily find foreclosure deals at auction. But if you really want to make a profit with foreclosures you should consider investing in a foreclosure list service. Such a service will provide you with foreclosure deals as they come available and before they reach the auction block. The earlier you buy the property the better.