Tips on Real Estate Investing: Foreclosures

There's news everywhere regarding the national foreclosure rate. From today's REALTOR Magazine On-line, here are some solid tips, the best of which is simply that just because a property is a foreclosure doesn't mean it's a good deal, should you decide to invest in a foreclosure:

7 Tips for Foreclosure Property Investing

With foreclosures rising nationwide, prices falling, and inventories swelling to historic levels, investors with a discerning eye and knowledge of the foreclosure process can build a profitable portfolio of distressed properties, says James Saccacio, CEO of RealtyTrac, which tracks foreclosure data.

Saccacio offers this basic advice to foreclosure investors:

• Know your market. The most important tool in your real estate investing toolbox is knowledge of the area where you plan to invest.

• Develop an appropriate investment strategy. Find an investment strategy that will work in your market, and then do what it takes to implement that strategy.

• Make the foreclosure process work for you. Decide what foreclosure buying technique works best with your investment strategy and your strengths as a person.

• Scrutinize each deal. Many real estate investors wrongly assume that if a home is in foreclosure it's a good deal.

• Rely on a trustworthy team. You'll be in over your head if you try to do all the work involved in foreclosure investing on your own.

• Network with banks and lenders. In a slow real estate market, banks and other lenders are saddled with larger inventories of foreclosed properties and will be more motivated to sell those properties at bargain prices.

• Act quickly, but don't be in a hurry. A slow real estate market gives you the upper hand as a buyer, but you'll still need to act quickly to get the best deals.

— REALTOR® Magazine Online