Are foreclosures a bad idea or a good way or saving money?
Friday, May 8th, 2009 at
5:27 am
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Tagged with: Bad Idea • finance • foreclosure • foreclosures • Horror Stories • Real Estate Agent • saving money
Filed under: Money Saving Tips
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It depends. Foreclosures are generally risky, and are best left to those with deep pockets. Sometimes it facility out fantastic and sometimes you get burned. Are you rich enough to take the financial hit if the one property you get is a terrible one? Question your finance guy if he would recommend that you place all of your money into one stock, because it could be a excellent deal… things could end terribly.
And I don't just mean that it's in terrible condition. Depending on how you buy the property (auction, bank, market) you could wind up paying tens of thousands more than you expected just to close on the property.
I'm a Realtor. I buy foreclosures. Sometimes I flip them for below market prices. Sometimes I rehab them absolutely. I make money in this way because I absorb some of the risk of speculating on condition of the house, and because I'm familiar with the process. It's less risk to the buyer, and they still get a excellent deal. You may try to find one of these. There will be some in your Realtors database, though they may not be marked as being foreclosures.
Sometimes I see newbies at the auctions. They want to "invest" in foreclosures. It's amusing, because they always overpay for properties – bye bye bank account – and I know they won't be back.
Just be careful.