Tips For Building Wealth In Real Estate
1. Find out who offers foreclosure properties in your investment area. Contact
each of the following: (a) Banks offering real estate loans. They will usually
have foreclosures they want to put in the hands of ambitious people such as
yourself; (b) Your County Clerk's office where they usually have foreclosure
properties listed for sale, and; (c) Federal Government offices (IRS, FHA, VA)
that have foreclosure properties you can acquire at low cost.
Get all the free information from these organizations that you can. They'll
be glad to put you on their mailing list, plus they'll supply you with a packet
of their current data. Study what you receive - it could give you a quick "college
education" in the foreclosure situation in your investment area.
Since there is a wide range of quality of foreclosure properties, you must
develop a sense for the good vs. the bad. Do this by visiting a number of foreclosure
properties offered to you. Make notes about each. Be completely frank with your
notes because they're for only your eyes - no one else's. If a property is in
awful condition, make a note of that. If a property is in superb condition,
note that also. You'll soon know the good from the bad!
2. Work with foreclosure sellers who will pay all closing costs for you while
providing the needed legal counsel free. Banks often offer to pay all your closing
costs while having their attorney act as your counsel. You can trust such an
offer because the bank does not want the property back. Instead, the bank wants
to see you successfully operating the property and making your mortgage payment
on time, once a month. If you're nervous about the bank's attorney representing
you, hire your own attorney to check the work done by the bank's counsel.
In general, your attorney will approve the bank attorney's work. And the fee
your attorney charges you will also be small - say $100 to $300 - because no
new original work is being done. Taking over foreclosures from banks can get
you started in real estate on almost zero cash.
3. Learn bidding techniques before you make an actual bid for a property. You
will have to bid on foreclosures offered at County Clerk sales and Federal Government
(IRS, FHA, VA, etc.) sales because their rules require public open bidding.
In making a bid you will usually be competing against others who also want to
buy the foreclosed property that appeals to you. Since open bidding is based
on raising the price of the offered item to the highest level possible, you
must be careful not to over-bid by getting caught up in the give and take of
4. Flip your foreclosure properties to make fast money without owning the property
too long. You can of course hold onto foreclosures and rent them out. But many
times you're better off flipping foreclosures - that is, selling them for the
highest price you can get, shortly after you buy the foreclosure. Why is this?
Because many foreclosures will require repairs and cosmetic work before they
are suitable as rentals.