If you’re looking for foreclosed properties as investments, check real estate ads in local and national newspapers as well as property magazines.
Also consider contacting local real estate agents and also specialist companies who specialise in distressed properties.
Preparation is paramount when looking at distressed properties, so do your research and make sure that you are pre-approved for loans, as most foreclosed properties sell at auctions.
Research property values in the area and talk to local real estate agents, about the area you are interested in and determine whether or not, there is a strong demand for rental properties in that area.
Ask agents if there are other mortgagee properties in the area, so that you can compare properties and see how many are available in the area.
The more repossessions in an area, the quicker property values fall.
Once you have found a property, get a builder to inspect the property and organize a pest inspection.
Some of the advantages of buying distressed property, is that you can often buy them for well below market value -10 to 30% and banks/lenders arrange all legal proceedings and pay all costs.
Be careful not to overcapitalize on the renovations, especially if your intention is to flip the property, so set a renovation budget.
Generally buying distressed property will provide a higher rental yield because of the better buy-in price and of course, they provide leverage for future investment needs.
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