Although buying foreclosure properties can be a very successful Real Estate investment strategy, there is a down side. One of the cons of buying foreclosures are the laws that protect the homeowners.

Homeowners usually face foreclosure on their properties for failing to pay their mortgage payments. When a homeowner falls more than two full months behind in payments, the lender usually begins foreclosure proceedings. While this presents some very good opportunities for a buy low and sell high Real Estate deal, there are some downsides to the process.

The laws of the various States differ, but in general, they seem to be bending over backwards to protect the rights of the home owners. This is understandable since the properties are often the primary residence of the owner and his family. The image of the bank agent in a black suit and a slick black mustache waving a foreclosure notice at some poor widow and her brood of children is a popular cultural image in America. In most cases, the laws allow the homeowner opportunities to make up his arrearages and recover his property. In some cases, this can even happen after the property is sold to you.

There is an ethical issue involved, too. The person losing their home to foreclosure may not be a poor widow with children, but they have obviously fallen on hard times. Most investors will have the attitude that business is business and many foreclosures sales actually help the homeowner retain some equity in his property even he is forced to sell it under full market value. Despite all this, the fact remains that you are making a profit out of the misfortune of another.

Another con of buying foreclosures is that there may be a delay in actually getting the current tenants out of the property. In some States, it may take as long as a year before they have to leave. In many other States, it still takes up to four months. During this period, you are unable to being the upgrades you are planning or actually take possession of your new property.

The buying of foreclosure properties is one of the most valuable tools in creative Real Estate investing, but there are some potential problems. It is not a transaction you want to get involved in with your eyes closed. If you are cognizant of the risks involved and understand the applicable laws, it can be a very profitable way to acquire properties with little or no down payment under market value.

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