Foreclosure property auctions can be intense. If you live in an area with a high concentration of foreclosures, you may find the auctions in your local county to be extremely busy, with a huge inventory of houses up for sale to be bid on. You may also find that all of the local real estate investors in your locale flock to these auctions and congregate there, engaging in fierce competition to snatch up the inventory.
How can you get an edge up on the competition?
The answer is that you need to make sure that you have done your homework thoroughly before showing up at the courthouse with your checkbook (or your investment partner's checkbook if someone else is putting up the money for you).
You can't just go to an auction and blindly buy a property just because it's in foreclosure. A lot of novice investors make this mistake. They think that just because a property is in foreclosure, that it is automatically a good deal.
But is buying a $200,000 house for $170,000 really a good deal? How much profit do you think you can make on this deal?
If your answer is $30,000, then think again.
Most experienced real estate investors will not touch this type of deal with a 10-foot pole. In most cases, you could end up losing some serious money if you were to invest in a house with these numbers.
How do most experienced real estate investors know how high to bid up a property before they give up on it and move on to the next one?
You have to do your homework on each of the homes up for auction before you attend foreclosure property auctions.
So, just exactly how do you do your homework?