Investing in Real Estate – Buying Foreclosures and What to Consider

List a property for sale at fifty percent of market value and bargain hunters will be out of the word job. Like termites in a feeding frenzy, some of the items to watch out for are often unsolvable by the time they are found. Properties in foreclosure come with certain obstacles that one must be aware of. I mean, you’d hate to lose all your hard-earned money and not have the ability to do anything with the property.

First of all, who currently lives on the property? What rights do they claim on the property? Do they have a property right? Personally, I lost twenty thousand dollars to a tenant who claimed he had owned the house since 1974. Even though he never paid taxes, he never paid rent and missed his third payment in early 1975.

If you have not been through an eviction process, it can be quite unpleasant. Some of the people and I’m not saying their tenants are professional rent beaters. This means that they have perfected the art of living in people’s homes for free. When you file for eviction, they will file a court order that will halt the eviction until the facts can be presented in a court of law.

They will file claims that no repairs were made, that the house is substandard, and a list of other items. What makes this such an obvious loss tactic is that you are typically not looking for money from them, but simply to vacate the premises. In other words, you’re not trying to collect rent, you just want them gone.

Sellers and renters who are losing their homes are often not in a position to repair anything that may be damaged. Worse yet, they may choose to damage the house themselves. Things they might do include flooding the house, removing the copper pipes, selling the appliances, or drilling holes in the roof to let the rain in.

Try to get your seller and/or tenants out as quickly and cheaply as possible. The best way I’ve found so far to empty a house is to offer them $500 – $1,000 cash in exchange for them having a moving truck all packed up and the house broom swept within two weeks.

Most seminars make everything sound so easy. You go to an auction, buy a house, and post it on craigslist. Well, until those hungry shoppers come knocking on your door with checks in hand, you have to prepare for the worst case scenario. Some of the above situations happened to me personally.