Reselling Foreclosure Homes

If you are buying a home in foreclosure as a real estate investment, the chances are that you are going to rent it out, or sell it. Foreclosed homes sold as investments can make anybody a lot of money, in a relatively short amount of time. Unlike a rental property, that gives a steady but small amount of money each month, along with all of the maintenance costs of keeping a property livable and up to code most people take the option of purchasing a home and then “flipping” it for more money. The first step is finding a foreclosed home that you want to buy from the bank. With all the problems in the financial world, most banks will most likely have an unfortunately large amount of foreclosed homes. After you find a couple of properties you like, you will want to visit each one to see the best deal.  You will want to comparison shop to ensure that you are getting the best value for your money.

There are many pros and cons to buying foreclosed homes as an investment property. Buying a bank-owned home, fixing it up and then making a short sell, also known as flipping, allows you to gain profit from the transaction without tying up your capital for an extended period. This short term profit usually outweighs the long term maintenance that goes along with owning and maintaining a property for rent. As a real estate investor, you will need to consider the benefits of each property and whether this deal is it a long-term or short term investment in your portfolio.

Another benefit of buying foreclosures is the fact that you are dealing with a bank instead of a homeowner. Avoiding dealing directly with homeowners can make a deal more predictable and profitable for everyone involved.

When you are buying foreclosures, you will want to try and get the selling price down as low as possible. Remember, the lower the price, the more money that you are going to make when you go to resell it. Finding foreclosed properties valued below the real estate market value price is not a difficult task. In many situations, you will be able to see some that are anywhere from 10 to 50% off the market cost.

After you have found a property, and know what the cost is, you will then need to research the market value of other homes for sale.  The reason that you will want to do this is that you will need to know what the resell value for the home.  For example, if you can buy a foreclosure home for $100,000, but the market value is $125,000, you will be able to make a $25,000 profit.  By knowing the appropriate numbers when you are dealing, you will be able to put yourself in the best position possible.  Many people take their chances or rely on guessing.  Why leave it to chance?  It only takes a few minutes to complete the necessary research. You can boost your profit margin by doing minor repairs and cosmetic touch-ups to the home and property, before placing it on the market. It may be a good idea to get a real estate agent to help you with this part of the process.

The process that goes along with real estate investing in foreclosure homes is not complicated.  You will want to keep the resell process in mind while you are buying the house. Be patient. Following your procedure will set you up for success, and a large profit down the road.