Foreclosure auctions are a treasure trove of lucrative deals to real estate investors for they are rich sources of handyman specials. However, before embarking on this treasure hunt of bargains, doing one’s homework is essential to come prepared, ensure that you make a killing and avoid walking into a trap of losses.

The first thing you have to do is secure a “bidder’s package” which contains useful information including the particulars on the auctioned properties such as property description, a report on the title, survey and financial data.
Decide on which property or properties you are going to bid on in advance and get to know it. Drive by the selected property to give you a picture of its condition so that you can estimate the needed repairs. Hiring professionals for assessing the property and estimating repair costs

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Bankruptcy alone does not relinquish ownership of the property. The bank has to legally foreclosure on the investor in order to take back the property. This means the investor could actually keep collecting any rents received until the property is sold at auction assuming the bank does not assume the rents as they are entitled to. The main thing bankruptcy accomplishes is that it eliminates the right of the lender to collect a deficiency judgment from the investor when the property sells for less than its loan amount.

Typical Foreclosure Viewing Instructions: Remove the Front Door Yourself!

Most experienced real estate investors and rehabbers have figured out a way to bypass having to be accompanied by a real estate agent every time they view a vacant home or bank owned property.  Some investors decide to get a real estate license for themselves while others have friends as real estate agents that get the lockbox combos for them. Others just sweet talk or persuade the listing brokers into offering up the combos – it’s possible.  These practices aren’t being recommended, so be careful not to get in trouble if viewing a vacant home without permission.  Many agents will actually instruct investors to bring a power drill with them to remove the front door to gain access to the house as long as the door is screwed shut upon leaving. … Read the rest

FHA Admits They are Hindering the Real Estate Recovery

The FHA has finally come to the realization that many investors buying and fixing foreclosures are taking much less than 90-days to rehab their homes.  Good rehabbers can actually have an ugly house ready for occupancy less than 30 days after its purchase.  So beginning February 1, 2010, the FHA is suspending the 90-day resale restriction imposed on sellers selling to buyers using FHA insured financing.

In order to re-sell a home to a FHA buyer in under 90 days, the following conditions must be met.

This chart was created using the information listed in the Waiver of Requirements of 24CFR 203.37a(b)(2) which is located on the HUD website at http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf.

Here are two more points not listed in the chart.

1. The 90-days flip restriction waiver will expire one… Read the rest

A busy rehabber and real estate investor does not have the time to view every foreclosure that comes on the market and work out the detailed costs of every purchase.  That approach is not an effective use of the real estate investor’s time and resources.  You will miss out on many good deals trying to analyze the cost of every rehab prior to submitting an offer.  Let’s make life as simple as possible here.

Follow these steps to start submitting multiple offers on foreclosures, REO’s, and HUD properties without ever seeing the property.  Learn to submit offers based on price points and spend that quality time with family and friends instead.

1.  Learn the neighborhood

The first thing an investor must do is learn the neighborhood inside and out that is going to be targeted for flipping homes.  … Read the rest

Define your “House Flipping” Strategy and Stick To It

When referring to flipping properties, we are referring to the “art” of buying a broken down house, rehabbing it quickly, and turning it into profitable asset in the least amount of time at a controlled cost. The exit strategy can be either to sell for quick profit or rent out the house for cash flow.  The decision typically depends on the state of the current economic market cycle. When property values are skyrocketing it’s easy to fix and flip for quick profit. When it’s a buyer’s market, usually during economic downturns, it’s easy to create positive cash flowing rental properties. Regardless of which profit strategy is chosen, stick to it without wavering.  In the long run this will save you money by not wasting time bouncing back and forth between strategies… Read the rest