By financen | August 13, 2008 - 5:47 pm - Posted in Business, Foreclosures

Yes, it is possible to make money in the foreclosure business. The key is to know the strengths and weaknesses. First time investors will more often face the problems in assessing the market value of the property towards which they are interested. Experienced investors do not run through the same problems because they usually have all their property valued close to the same amount (3% variance). They will use local multiple listing service comparable sales, Title company comps and experience and experience to come to that value. It is important to know the value of the property. Because if you are not aware of the price it will be sold for on the open market, you will hardly do anything with that property.

The second important issue is to know the laws in your state. If you are interested towards purchasing a property but due to not knowing the laws fairly of that state, you might fall into serious legal troubles due to structuring an illegal deal. Every state has its own laws that determine what you can or cannot do if the borrower has defaulted in his monthly payments. Do your homework and know if the particular state uses mortgages of trust deeds and the legal time frames and implications of each.

Third issue is the money. It certainly helps to make a good deal if you have the monetary back up. But what happens if you are falling short of finance and you don’t want to miss the property that is getting sold. It is important that you have a strong financial back up to be able to find properties and keep track of it, cover on going office type expenses etc. Even if you don’t have the money but you know someone who is ready to invest, that’s also a good deal.

The fourth issue is the knowledge. Federal tax liens, partial interests, leased land, property information wrong, unpaid property taxes and wrong common descriptions are all things that have hurt investors. You should not be investing in foreclosures if you don’t know how to check the following things.

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