So, now that you have made the decision that the place to invest is in foreclosed properties, you have one more thing to do. You have to locate the appropriate foreclosure homes. There are lots of places to start your search for this kind of property, and I have 2 very general classifications: government foreclosures and bank owned real estate.
There are a variety of types of government foreclosures. Examples range from a wide variety of governmental agencies, from housing to veterans to banking administration agencies, to other more traditional sources, such as Fannie Mae and other quasi-governmental institutions. There is even a governmental agency that is solely responsible for figuring out what to do with property it no longer wants and getting rid of it!
If you’re looking for houses that have been through REO sales then check online for listings of REO properties. These are posted by a number of banks. Directories of banks which do this also exist. Otherwise, try finding REO properties through asset management companies. They are employed to help lenders dispose of these assets and will often list such properties on their own websites.
It is also very important to look at pre-foreclosure homes as a possible source for your investments. To be able to capitalize on this option you really need to have a decent understanding of the foreclosure process. But at various stages of the process notices are recorded with the County Clerk and these public records may be searched by anyone which gives you the possibility of locating properties that are heading towards foreclosure. You can then approach the owners about acquiring the property prior to foreclosure and help them out of a sticky situation.
A step in any foreclosure is that a Notice of Sale has to be placed in the local paper. Look for trustee sales in the section where public notices are in local publications and magazines. You are at an advantage if you know about the properties before they are at this step in the proceeding. If you make a purchase at a trustee sale, be sure to do your homework, as the properties as sold “as-is, where-is.”
A good use of your time is to get familiar with the website in the area that is the focus of your search, in order to see what is available in the way of foreclosure research. This data is of use if you want to get the land before the actual foreclosure, or if you prefer to bid at a foreclosure auction.
As you may notice there various sources of foreclosure homes and I recommend that you explore several sources as opposed to only using one foreclosure database. If you expand to include the listings of a few banks, asset managers and government agencies as well as the county clerk you will have a more varied range of listings to chose from. And this will give you an edge over investors competing with you for properties.
At some point, you may have made the decision to begin foreclosure investing, but you haven’t yet started since you don’t yet have foreclosures. Two key groups of listings include government foreclosures and bank owned real estate. It is useful to think in terms of two groups as there are numerous ways to identify properties. Explore several sources as opposed to one database. If you expand to include the listings of a few banks, asset managers and government agencies and the county clerk you will have a more varied range of listings to chose from. And this will give you an edge over others.
- David E. Williams
This entry was posted on Tuesday, December 1st, 2009 at 9:12 pm and is filed under Finance, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
