If you are new to real estate investing and considering buying foreclosure properties, you need to be realistic about what you are facing. If you feel more sober about foreclosure investing after reading this, I will have accomplished my goal.
Despite what you may have read or heard on those late night infomercials from the so-called “gurus” trying to sell you their books, foreclosure investing is not a good investment approach for beginners. I recommend that you have at least a couple of years' experience with more traditional real estate investing first.
The profits from foreclosure investing can be huge. That makes them so attractive. There is an awful lot to know in order to avoid the problems that can occur. If you don't know what you're doing, one disastrous foreclosure investment can wipe out your capital and your enthusiasm for all real estate investing.
There are three basic approaches to buying properties in foreclosure. They depend on the stage of the foreclosure process: buying shortsales, buying at the foreclosure auction, and buying from the lender after the foreclosure sale.