With more real estate investors in the market than ever before, and with homebuyers becoming more shopping savvy, buying that real estate property for pennies on the dollar is a pipe dream for many investors interested in flipping houses. However, you can still find incredible bargains that will net you a healthy profit if you know where to look. The best places to look are:
*Pre-foreclosures. If a home is in distress but hasn't gone into foreclosure yet, it can be a great time to buy. In this situation, you're buying directly from the home owner, who’s often in financial distress and needs cash now. In order to ensure a quick sale and instant cash, the homeowner is often willing to shave some money off the asking price in order to secure save their credit. By buying the sort of property, you are helping the homeowner avoid credit disaster as well as foreclosure itself. Plus, many homeowners facing foreclosure have not had the money to make basic repairs on the home, so you can often shave a few thousand dollars extra off the price of a home because of the home’s current state.
*Sheriff Sales. Homes that have been repossessed or have otherwise fallen into the hands of the state are often auctioned off to the highest bidder. These auctions can be a bit nerve-racking, and are not generally recommended for the new real estate investor just getting started in flipping houses. While you can find great sales here, many savvy investors show up for these sales, making it harder for a novice to get their foot in the door. You also have to do your homework ahead of time, since sales are final, “as is,” and very fast.
*Foreclosures. If the homeowner has defaulted on the mortgage, the lender will sometimes resell the property after it is repossessed. While foreclosures are not always the bargain that new-home buyers assume it is – many lenders sell at near market value -- they can save you money, especially on a home requires a little bit of cleaning up as well.
*Bankruptcies. In cases where someone is selling a property off to repay creditors, or in cases where a home has been use for collateral and is being auctioned off in order to repay a defaulted loan, bargains can often be realized, since the amount of money that the creditors may need to cover the loan may in fact be less than the actual value of property.
*FSBOs. For sale by owner properties can be a good source of bargains, especially in cases where the owner is in financial distress and wants to sell quickly. In cases where the owner is simply moving out of town or has inherited property, there may also be pressure on the owner to sell quickly. In many cases, the owner may be willing to reduce the cost of a home just to ensure that it sells fast.
