If you are a beginning real estate investor or even an experienced one you need all the tools you can get for buying deals. One of the best ways to buy homes at discount prices is to buy foreclosures but there are other types of properties that you can make money with. Don't limit yourself in the investment business, know your options.
Distressed properties are great bargains. You have seen the signs, "we buy houses in any condition". Why would anyone buy a distressed property? The reason is because the current owner can't sell the property for retail and that means you can get a bargain. The key to buying distressed property is to know exactly what is wrong with the property, the value of the property after you have repaired it and the cost to repair the property. The rest is just math. Don't overlook distressed property; they can be diamonds in the ruff.
Real Estate Owned or REO's can be great deals REO?s are properties that the bank has foreclosed on and had to take back. These properties are typically discounted from the retail price because they need some cosmetic work. Most of the time you will need to buy these properties using a real estate agent. I use several agents and they will call me when a new REO is about to be listed.
Government owned real estate can be good bargains. Most investors have heard of HUD homes and VA homes. These homes are foreclosed homes that the government has taken back. These homes are much like REO's. They usually need a good cleaning, carpet and paint. I know investors who only buy HUD homes and have done well.
Motivated sellers provide homes at discount. I like to buy homes from people who need to sell their home fast. These people usually ran into some bad luck and are about to be foreclosed on. I typically send a letter to people who are in foreclosure explaining that I would love to buy their home. This type of deal takes a little extra know how but the rewards are great. Not only will you find some nice deals, you can help someone out of a bad situation.
If you need more real estate deals then familiarize yourself with all the different types of real estate bargains. Start viewing some of these types of properties and then buy one.
