Are Foreclosures a Place to Get Good Deals? Can you really buy a house for pennies on the dollar? How do I find these properties and what do you need to do to get the best deal?
Every time someone starts looking for an investment, they come to me and say they want to see foreclosures. When I asked them if they would rather get a good deal on a house, they looked at me puzzled and disappointed.
So I thought I should clear the story up for as many people as I can. Here’s the deal. Foreclosure is a process to evict a homeowner when he has not paid his mortgage. It does not mean that the house is a good deal. In fact, these days it’s probably not a good deal. When I tell people that, they always ask me, how do you get a good deal? Well, at least the smart ones do. The others go to find an agent to show them the foreclosures.
The answer is… Find a motivated seller. How to find motivated sellers? There are several ways:
1) Advertise on radio or television – this is expensive and usually not for the beginning investor
2) You advertise with Bandit Signs – You know the signs you see on street corners – “we buy houses”
3) You go to court and get lists of eviction, divorce, and probate files. He sends them letters letting them know that he will buy their house quickly, in less than 30 days.
That’s where you find great deals as an investor. Once you find the deal, there are several ways to handle it.
1) Flip it over
2) Lease option
3) Fix it and sell it
4) Fix it and live in it.
5) Rent it
There are probably a couple of other things you could do with the house, but those are the main things. We also look at other opportunities such as IOUs, apartments, college housing, Go zone investments.