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Smart Ways To Profit From Foreclosures

forbes.com — Beware. Buying a home in foreclosure is not for the meek. Those with an appetite for risk, however, will find the tumultuous market stocked with plenty of investment opportunities

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  • Sanduu, on 06/21/2008, -0/+4In business, the more you risk, the more your revenue your chances for a higher ROI will increase.
    • str3ama, on 06/21/2008, -0/+3that goes for just about anything in life.
    • masterm1nd, on 06/21/2008, -0/+2also, the less...
    • rrbest, on 06/21/2008, -1/+3What exactly are you risking if you're certain of greater revenues?
      • cdigioia, on 06/21/2008, -0/+1You're not certain, that's why it's called "risk".
  • wjackson, on 06/21/2008, -2/+10Article summary:

    1. Have money.
    2. Do research.
    3. ??????????
    4. Profit!!!
    • jitjit, on 06/21/2008, -0/+4I believe you forgot

      3. Buying a home in foreclosure
    • jfreeman, on 06/22/2008, -0/+2Unfortunate fact: it takes money to make money. This is how the rich get richer while the poor and middle class keep struggling.
      • supermanred, on 06/22/2008, -0/+2Don't forget that the tax man takes from the poor and middle class while allowing the rich to get richer.
    • ForeclosuresREO, on 07/31/2008, -0/+0Use other people's money
  • DirtyBinLV, on 06/21/2008, -0/+3Me and my wife bought a foreclosed house in Las Vegas a few weeks ago. We had been looking for a year and watched prices dropped 30+% between last summer and early this year. Starting around February or March, people started buying and prices have been flat since. We got a place for almost exactly half of what it sold for new in early 2005. Buying from a bank can save a good amount of money, but it's a huge pain in the butt. They get back to you at their convenience, if ever. If you find a good agent and be patient, you can end up with a great house at a good price.
  • digghasnoethics, on 06/21/2008, -1/+3There is an assumption in this that prices will fall for a few more years, then turn around and start rising again.

    The problem is this puts it firmly into the 2012 timeframe when all sensible expectations have the full impact of peak oil beginning to bite. There is a high likelihood that the shape of the housing market will change away from suburbs and towards higher density living. At the same time the disposable income available for housing will be cut by the permanent depression and cost of energy. Housing and land is only worth what people can and will pay. That will be lower in future.

    In short, if you want to buy accommodation, focus on high density urban plots and make sure you get them extremely cheap.
    • crispee, on 06/21/2008, -0/+2"That will be lower in future."

      References please. Otherwise you're making just as much assumption as you blame the article for, if not more.
  • jeylux, on 06/21/2008, -0/+2my wife and i bought a home in Michigan last year that was bank owned. It was just at the starting of the collapse in our general area.

    It's the best thing we've ever done. We don't plan to move within the next 10-15 years (provided i can keep a job in Michigan...)

    But, we bought the house for 58 cents on the dollar. roughly saved 130k from it's previous selling price about 1.5 years prior.

    It was actually a breeze to deal with the bank, i made an offer and they countered within 2 hours. We went from offer to ownership in 2 weeks. Very quick and efficient.




    • crispee, on 06/21/2008, -0/+1We bought from a bank too. They were slow and unresponsive. I guess it really depends on whether you get a good case manager.
  • unknownpoltroon, on 06/21/2008, -0/+1One thing to remember that they dont show on a lot of those flip that house shows when you buy that fantastic foreclosure fix up:

    A lot of areas, the foreclosed has the right to buy the place back against your will up to a year after the foreclosure.

    Keep this in mind.
  • LastDitchHero, on 06/21/2008, -0/+0Have cash, don't try to cheap out on your contractors, know when to hire out the works vs do it yourself, use easy to use materials such as laminates and vinyl.

    I do this all the time. Also learn about tax sales in your various state. In my home state I can buy houses all the time for less than 2000 dollars. Tax sales aren't a good way to buy a house to live in but they are a great way to buy investment property (at least in my State).
  • JohnLawson, on 06/22/2008, -0/+0My mind instantly went straight to the two ceo's of bear stearns getting arrested for mortgage fraud =)
  • finesse7, on 06/25/2008, -0/+0You're right you must be educated going into the purchase of a foreclosure. They can be Incredibly successful or once you own it you find out something was hidden. Just be educated before you buy foreclosures and you will make massive cash.

    Bryan @ Finesse
  • SellerFinancing, on 07/01/2008, -0/+0Caution is the word. Otherwise, you will end up in a horrible situation.Let's suppose that you just picked up that house that 2 years ago sold for 500K. And you paid 400K. 20% discount sounds good. But what happens when the market drops some more as it will since most statistics show us barely half way into the mortgage/foreclosure crisis. You overpaid. So check historical pricing for yhe area you like. Fins out what the house would have sld for about 5 years ago. Don't pay more. You will probably be safe. And if you plan to be there for 10 years, you should see appreciable gain.
    But how about financing? How do you pay for it? Banks aren't lending. Maybe we can help. Check out www.fastsellerfinancing.com for more details
  • schmuckguy, on 07/25/2008, -0/+0if you want to profit in Solano County check out http://www.solanocountyforeclosures.com
  • ForeclosuresREO, on 07/31/2008, -0/+0I agree with this article, the best thing to do is to get pre-screened foreclosures and REOs. It has worked for me in the past. There are a few services, the one I use is the reo investment group in LA area but they have foreclosures all across the country.
    http://www.reoinvestmentgroup.com
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