One of the best methods of current real estate investment is investing in houses that have been foreclosed. When a house is foreclosed, the owner, or the individual, who has taken out a loan from a lending institution has usually defaulted on their payments for the loan. The lending institution takes possession of the home, and will usually want to sell the home as quickly as they can which usually allows for a lower selling price, interest rates, and down payment.

One of the keys to being a proper investor in foreclosed homes is to create a personal investment plan. Without an investing plan, an investor is as susceptible as a mom in a grocery store without a shopping list; she gets side tracked by every “sale” in the aisles and she will end up leaving with time wasted and possibly poor purchases. An investor’s investment plan should contain a detailed list of exact specifications defining what is wanted such as the type of neighborhood, square footage, the length of time the investor wants to hold onto the house, for quick resale or for renting, old or new, etc.

Another item that should be included in the investing plan is how the capitol used to invest in the homes will be raised. Decide if the capitol will come from family, friends, or more typically a lending institution. In the case of a lending institution, be ready to illustrate the investing plan to the lenders as they will want to know what the property values are in the neighborhoods that will be invested in, the market for prices, and the personal credit score of the investor.

To make wise and intelligent decisions when investing and purchasing real estate requires a level of expertise that only comes with experience. With early investment purchases, and possibly all real estate purchases, using an experienced, certified real estate agent can save an investor from making poor investment decisions. The most useful aspect of a real estate agent when investing is their personal knowledge of the market trends for different neighborhoods.

To save money and time contracting out different inspectors, using the exact same inspector each time who has a good report with the investor is a wise investment policy. The inspector or contractor will be able to give faithful estimates on all needed repairs and maintenance costs. Just because a home was foreclosed on does not mean the prior tenants trashed the home, but often time does mean the building will need repairs and maintenance. Having faithful estimates is paramount to successful investing.

Last, an investor in foreclosed homes should build a network of friends or acquaintances who are also involved in investing. They will often have real life experience and can share valuable lessons they learned from that experience that can save any investor time and money by learning from their mistakes.

In summary, foreclosed homes are often sold at a fraction of the market price because lending institution do not like being in the business of maintaining homes. An investor who has a plan of specific qualifications for what they are looking for, a line of credit from either a lending institution or friends or family, and a support team such as an agent, inspector and friends will find that investing in foreclosed homes can be a profitable endeavor.

Author Bio: Juhlin Youlien writes about az real estate including Paradise Valley AZ homes for sale and Fountain Hills AZ homes for sale. Paradise Valley real estate and Fountain Hills real estate include luxury home areas in AZ.

Category: Real Estate
Keywords: homes, real estate, buying a home, selling a home, realtor, realtors, loan, mortgage, foreclosure, s