Foreclosure homes for sale can be fantastic investment properties. These homes can typically be purchased at far below their market value, meaning they can often offer a very high return on investment. Buying a foreclosed home is an excellent option for anyone who intends to pursue a fix and flip strategy, and many could even be great rental properties. Use this guide to learn how to find foreclosures for sale.
Auctions
Foreclosure auctions are one of the best places to find REO property. These auctions are open to the public, meaning that you can attend whether you’re a beginner or a seasoned investor. This method of finding foreclosure homes for sale can be a bit uncertain, though. Since it is an auction where real estate investors make their bids on the spot, there’s often the chance that someone may outbid you. Another common issue with these auctions is that you won’t have the ability to inspect the property before placing your bid. Nevertheless, you’ll find foreclosure homes for sale at very low prices, and many will be great investment properties.
One of the newest ways to find foreclosure homes for sale is online auctions. These run under the same general protocols as regular real estate auctions, but with the option to participate from afar. This is a stellar option since it opens up a whole host of new possibilities, and allows you to find investment properties far from home. You can, therefore, engage in long-distance real estate investing, and find properties in markets that show a lot of promise. This can be especially useful if your local housing market is facing low occupancy rates, poor appreciation, or any other negative indicators. Finding foreclosed homes for sale in stronger markets can be a highly rewarding real estate investment choice.
Related: Real Estate Auctions: Everything You Need to Know
Real Estate Agents
A real estate agent will usually know where to find foreclosure homes for sale. Given that this property type is a bit unconventional for many investors, enlisting the help of a specialized professional could be a great way to go. This is especially true since real estate agents have access to the MLS, which is typically beyond the reach of most investors. All foreclosures are listed for sale on the MLS, and therefore within the view of real estate agents.
Related: Do You Need to Hire a Foreclosure Specialist When Buying a Foreclosed Home?
Real Estate Websites
Although typing “foreclosure homes for sale near me” into your search engine might get some results, consider some of these real estate investor website options for a better chance.
There are a handful of government agencies that could be consulted for this type of property transaction. Consider looking specifically into the Federal National Mortgage Association, the U.S. Department of Housing and Urban Development, the Federal Housing Administration, Treasury Department, and Small Business Administration. Their respective websites will include many foreclosures that you could purchase as investment properties.
Many banks across the United States will have a specialized section on their website devoted to bank foreclosure homes for sale. Quite typically, there will be a lot more options available on these websites than others. You’ll also be opening yourself up to some of the best real estate markets across the U.S.
The Mashvisor Property Marketplace
Advanced problems need advanced solutions. The Mashvisor Property Marketplace is proving to be an incredible resource for investors across the United States. This platform provides real estate professionals with a vast array of off market properties that are available for purchase. This platform is especially powerful since it accumulates listings that aren’t even on the MLS. Therefore, you might even have the edge over your real estate agent.
This is also a fantastic resource when searching for foreclosure multi family homes for sale. This platform allows you to customize your search by location, price, and property specifications. Therefore you can get quite specific with what you’re searching for. Multi family foreclosures would produce multiple revenue streams once rented out, thereby making it a very attractive choice. The ability to filter specifically for this property type is therefore a considerable advantage.
What makes this specific platform so powerful is the advanced analytics that it provides. Not only will you get a huge number of listing, but you’ll also get a detailed report of each one’s investment potential. Crucial numbers like return on investment, cash on cash return, and capitalization rate are only a click away. Therefore you won’t have the uncertainty that comes with auctions or the riskiness of buying an investment property through a bank website. You can rest assured that the numbers make sense.
Related: How to Find Off Market Properties in 2020
I’ve Found a Foreclosure. Now What?
Every smart real estate investor knows that they need to crunch the numbers when investing. Buying foreclosure homes for sale requires more calculation since there’s a decent chance you’ll need to perform maintenance work on the property.
The best way to analyze foreclosures is by using an investment property calculator. You’ll foremost need to compile an exhaustive list of your outgoing expenses and your sources of income from the property. Within the context of foreclosures, this will involve a budget for repairs and upgrades. Consult with a contractor to get an estimate of how much you will need to spend on repairs. An investment property calculator can then run the numbers and inform you whether you can expect a positive cash flow or not. If the repairs budget outweighs the income that you will be making, you may want to move on from that property. But thankfully, now you have the know-how and resources to find more foreclosure homes for sale.
Bottom Line
Many real estate investors have a difficult time finding foreclosure homes for sale. But by knowing where to look, you shouldn’t have much of an issue. Whether you intend to go to a live auction or scroll through the multitude of online options, you’re sure to find something that makes sense for you. For the best deals on foreclosures, though, be sure you’re using the right tools and running the right numbers.