I want to buy a foreclosure at half its Market Value, change the title owner, put a fresh coat of pant on, and make a ton of money in a month. I should also lose a ton of weight and not have to put up any money of my own in the process, either!
Reality has to intrude sometime. Making money in real estate investing is no different than any other investment really. The amount of time you spend before, during, and after a foreclosure investment deal will determine how much money you make or you do not make.
Plan on working at it as seriously as you want to get a financially significant value out of. Very few sweetheart deals will come to you, knock on your door, and hand you a bag of money.
The dirty little secret of foreclosure investing is that the investors almost always have cash on hand of their own or are fronting for other investors who do. Don’t let this discourage you if you lack those resources. You can still accomplish what you intended, to profit from foreclosure investing. You will need to husband your time and energy carefully to complete the deal in an appropriate manner.
In addition, houses that are going to sale on a foreclosure almost always need a lot of work to bring them up to Market Value. Inevitably the owners try to cut maintenance costs to stay in their property. Wear and tear has an impact on any asset’s value.
While we would like to think you could also just fire up the MLS and have all your foreclosures listed on page one in order of the money you will make, reality seeps in there sooner or later. You need to pour throw the listings, see some properties, to figure out which deals make sense. Monitoring the opportunity is required as is beating the bushes to gather everything there is to know about that property while still staying in front of all the other investors who may want the property.
Quite often knowing your personal strengths and weaknesses is a major problem for the majority of people beginning in foreclosure investing. xperienced investors will have developed a system to help then in evaluating opportunities. They developed it the hard way, by previous investments, making money and sometimes losing money when something overlooked turned a deal into a loser.
Next you have to be aware of the law in the state where you are investing in the property. Structuring a deal that won’t pass the legal ‘sniff test’ in your state won’t work. Your deal has to be rock solidly legally which requires you to be appropriately informed.
And last but not least there is the subject of money. While you don’t need to bring suitcases of bills into every deal to make it work, it doesn’t hurt and in fact will open up more opportunities to you. Never fear it is not absolutely required. It just makes things easier some times.
Keep your enthusiasm up and your goal clear in your mind. Nothing can stop you from getting that foreclosure investment done profitably if you spend your time wisely and develop your own system or learn from others.