Foreclosure flipping may be a little more difficult today but it’s still a good investment option. In some parts of the country, big institutional investors bought up most of the foreclosures and turned them into rentals. However, their activity in this market is now slowing down considerably. The remaining weakness in the market is fewer houses on the market but they are still out there and the big lenders are still bringing more onto the market as their strategy to not cause house prices to plummet by bringing all of the foreclosures on the market at the same time.
Foreclosure Flipping – Getting Started
Unless you’re a professional investor watching the residential market every day and all day, you really need to talk to a real estate agent about a foreclosure in your local market. Agents do watch the market all day and every day. Start by telling your agent what you are looking for in a foreclosure flip. Are you looking for something that only needs a little light renovation or is the entire kitchen and both bathrooms being ripped out and replaced?
Take a drive through a few of the neighborhoods in your neck of the woods. Take the long route to the store or a different path home from work to become more knowledgeable about what’s available around where you live. Sooner or later, you’re going to come across something that is clearly a foreclosure. It might not yet be on the market but your agent can do a little digging to find someone to talk to about it.
Register for Online Foreclosure Updates
There are websites listing properties that have been foreclosed on. You can get updates as soon as a property has a foreclosure. Take the information on these sites with a grain of salt. The lenders posting the information almost certainly have never seen the property. If the lender is ready to sell the property, they probably hired a real estate agent. Agents always portray a property in the best possible view. Pictures and descriptions of the property might not be the same as when you view it in person.
Be selective about any foreclosure house before deciding to invest. If you don’t know the neighborhood, learn about it first. If there are many foreclosures in a particular neighborhood, there is probably a reason. People may be walking away from these houses or unemployment might be unusually high or there could be another reason that will make it difficult to complete your foreclosure flip.
Finally, have a thorough inspection done of the house. Foreclosure homes have a reputation for needing a lot of repairs and maintenance. People that are angry because they are losing their homes do a lot of damage and take ceiling lights along with kitchen sinks. Know exactly what you are getting into.
If you want to work directly with me on the foreclosure flipping business model or any of the other investing models that have proven highly profitable, please join me at www.wendypatton.com/what-is-wendy-pattons-inner-circle.
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By Wendy Patton
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