You have to learn how to avoid traps: one of the things that make investing in foreclosures irresistible is the fact that the profits can be really huge. This is what makes many people throw all caution to the wind when investing in foreclosures, which at times leads to disastrous losses. Start by knowing the market value of the property you are buying. Get a good realtor to do an appraisal on the property before you open negotiations.
Know that you are buying foreclosures: most people have the general idea that they are buying a foreclosure in mind. However, few stop to think about what that really means. There are many reasons that lead to houses becoming a foreclosure cases. Some of the reasons include the house being an environmental hazard, drug houses, old mechanical houses and homes in high crime areas. Be careful about these types of properties as you could be buying your way into a lawsuit. Have a realtor do a deep and detailed background check on the property. Only after you have established that it is clean can you go ahead and start the purchase process.
Calculate the cost of rehabilitating the property: foreclosure property is nothing like the new homes that people invest in. most of the houses have been used for quite a number of years. As a matter of fact, most of them are usually in pretty bad shape. When you are buying this property, you need to make sure that you have calculated the cost of rehabilitation, and that the resell price you are aiming for will be able to cover this cost.
Know when to bid and when to walk away: once you have narrowed down your options to the property that seems to have the highest possibility of being beneficial, you can go ahead and make a bid for it. It is important to note that after you make an offer, you may have to wait for up to 3 months, especially for property that is owned by the bank. Alternatively, you can try buying property at auctions, but, make sure that you avoid paying too much for this kind of property.
Basically, those are the tips that can help you buy and rehabilitate foreclosures and investment property. With the guidance of a good realtor and a commitment towards making the property presentable, you will be making huge profits in this investment option.