Rapid and sweeping changes in the real estate market are altering the way investors and agents buy and sell properties — especially foreclosures. Increasingly, real estate investors are relying on the Internet to locate, track and ultimately buy and sell real estate.
But real estate investing, like sailing a ship in the open sea, is a science of proved principles and methods. Indeed, navigating the uncharted waters of the foreclosure process can be a perilous journey. Therefore, RealtyTrac has compiled The 7 Lost Secrets of Successful Foreclosure Investing:
SECRET #1: Secure Financing — Step one is obtaining a lender's written pre-approval letter before beginning to shop for a house or condo. Go to a local banker — or an independent mortgage broker — and shop around for the best loan. How much money you can borrow? Being pre-qualified gives you bargaining power when it comes time to writing offers.
SECRET #2: Plot a Course — Chart your course before you set sail. The compass of accurate knowledge should guide you to your desired results. Smart captains plot their course — and stick to it! What are your goals? Do you want to buy one house or 10? Buy and hold or flip? Write a plan before you start writing offers. You need to know where you’re going in order to get there.
SECRET #3: Assemble a Seaworthy Sales Team — Begin your foreclosure adventure by creating a team of real estate professionals that can help you locate, analyze and purchase properties quickly. Your team should include people you trust, including bankers, lawyers, real estate agents, appraisers, title companies, contractors and master craftsmen (painters, carpenters, roofers, electricians and plumbers).
SECRET #4: Research Your Area — Once you have assembled the crew that will join you on your real estate journey, begin researching your target market. Real estate agents call their target market a “farm.” Cultivate your farm by acquiring as much information about your area as possible. Learn what the median sales price is in your farm. Understand the price per square foot. Know how many homes sold in the last 30 days. Expert real estate investors know the answers to these and many other questions. Become an expert.
SECRET #5: Cast Your Net for Foreclosures — Searching for real estate foreclosure bargains begins with research compiled by RealtyTrac. Explore the thousands of bargains at your fingertips by maneuvering through pre-foreclosures and foreclosures — all from the comfort of your home. Narrow down your search to the best deals. Not all foreclosures are good deals. Learn how to spot winner with RealtyTrac.
SECRET #6: Take the Helm and Set Sail — Many real estate investors are plagued by the “paralysis of analysis.” They study a property or a market and become an expert in an area, but they never follow through and write offers. Eventually, the competition spots the deal and a good real estate opportunity evaporates. Don’t get trapped in the “paralysis of analysis.” Move fast. Take the helm and steer. Write offers — low-ball offers. And set a goal to write one regularly — whether that’s one a month, one a week or one a day.
SECRET #7: Calibrate Your Compass — Ask any lawyer, real estate transactions are booby-trapped with unexpected surprises. Learn form your mistakes. Your best work will come after you’ve gone through some choppy waters. Polish your skills to perfection. Read your contracts; then re-read them again. Rely on your team to help navigate around trouble.
Early on in your real estate investing adventure, you will discover that there are no charts to guide you, no lighthouse, no buoys marking the reefs. The rocks and shoals have grounded countless inexperienced investors. Make sure you avoid the wrecks of the past by plotting your successful foreclosure purchase.