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Purchasing a Wholesale Foreclosure

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When is the best time to buy anything? When it's on sale! Right now and probably for the next few years you will have a once in a lifetime chance to buy real estate at a deep discount. Foreclosures are at an all time high. Supply is still increasing so the deals keep getting better and better. We will show you how you can profit in the foreclosure market by following these simple steps. This may be one of the best times in your life to profit from the real estate market.

Buy foreclosures from a wholesaler! Save yourself a lot of time and headache. What is a wholesaler? A wholesaler is a company that acquires multiple foreclosure properties at time and sells them to the public.

Great Quote...
Decide what you want. Decide what you are willing to exchange for it. Establish your priorities and go to work. -H.L. Hunt

Foreclosure Opportunity! 

Step 1. Find a potential Property

Buying a foreclosure at an auction is not the only way to take advantage of the struggling residential market. There are some companies that buy homes at auctions and in bulk from builders to resell to investors at a discount. The following are a couple of Arizona foreclosure wholesalers.

There are companies that actively participate in the foreclosure arena. These companies go to the auctions, negotiate with the banks, and work with people who are in the process of being foreclosed. Their business model is to quickly acquire the property and resell it with a small margin leaving a large margin for the investor.

This means that they will constantly have an inflow of new properties that will sell fast, so be ready to do your homework and act fast.

For this example we will take a look at the property pictured above, offered at one of the companies mentioned in the links for $104,000.

Here are a few of foreclosure wholesale companies.

Buy AZ Foreclosures
This company buys and sells forclosure properties. If you register they will send emails everytime there is a new deal available.
Foreclosures 4 Investores
This company also buys and sells foreclosures. They have properties in other states as well as Arizona.
FarBelowMarket.com
Top ranked foreclosure wholesalers in California
AZ Wholesale Homes
This site was created by Arizona realestate investors to bring foreclosure properties to other investors at discounted prices. They update their site regularly so visit often
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Step 2. Value the Property

Once you have found a property you are interested in you have to make sure you are getting a good price. There are a number of ways to do this. First, you can consult your realtor. If you want to do a little more research on your own you can look up compararable listings on your local realestate sites. A third way is to use an online service such as zillow or homevaluebot.

The property we are reviewing was offered by one of the companies and was located in Tolleson, Arizona. The asking price was $104,900. It is a 5 bedroom 3 bathroom home with 3,110 square feet. Now we need to find out what it is worth.

What do you think the value of this property is?

See value per Zillow in Step 3, but take your best guess first!

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Step 2.5 Tips When Valuing The Property

Things to look out for that may increase your cost.

1. Are there back taxes owed?
2. Have you personally inspected the property?
3. Can you have an inspector check the property?
4. Does the property need renovations?
5. How is the landscaping and curb appeal?
6. What is the average length of time on the market to sell or rent a home?
7. Is there an HOA and is it current?
8. For older homes, is there lead based paint or asbestos?

All of these are important to consider when valuing your investment. Avoiding unforeseen expenses can make you far more profitable when investing in foreclosures.

Ebay Has Some Helpful Foreclosure Tutorials and Programs

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Step 3. Get Financing

It is easy, but be prepared to pay.

Once you have the property value you need to find financing, so you need to decide if you are going to try and flip the property or hold it longer and use it as a rental. When I ran the value of this on Zillow it came to $178,000 and with a purchase price of $104,900, I could have potential profit of over $70,000.

Either way you are probably looking at a private hard money lender unless you have the cash to purchase it. Hard money lenders tend to be short term and charge higher interest rates, however they usually loan based on the loan to value (LTV) and not primarily your credit. This will actually allow you to purchase multiple properties while building your real estate investment portfolio. You can search for Private Money lenders on almost any search engine to find multiple local lenders.

Be ready to move quickly, most of the good deals are sold immediately.

Hard Money Lenders

When traditional financing isn't fast enough.

Avatar Financial Group
Nationwide direct hardmoney lender that can close loans in as little as 2 weeks.
Mortgage Banking 4 Investors
This company works closely with Foreclosures 4 Investors.
1st Hard Money Source
Specializing in Nationwide, Rehab Loans, Commercial, Construction, Bridge, and Land and Subdivisions

Equity vs. Credit

When you go to a hard money lender the process is a little different than your traditional bank. First off, a lot of hard money lenders are equity lenders versus a traditional bank of credit lenders. Simply put, many hard money lender will primarily look at the underlying equity in the property they are lending on where a traditional bank looks at the credit worthiness of the borrower and the potential to pay back the loan. When doing a deal make sure you have sufficient equity built in so that the lender will approve your loan. Remember, when working with foreclosures, time is money. The faster you can get your loan funded the faster you can start profiting from your investment.

How to Buy a Foreclosure

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  • monakoussa Nov 25, 2011 @ 3:52 pm | delete
    Informative lense.
  • bloodytuckercool Jul 24, 2011 @ 7:22 am | delete
    Its good to read this lense.Thanks for sharing it.

    Scam
  • bloodytuckercool Jul 17, 2011 @ 9:04 am | delete
    Its good to read this lense.Thanks for sharing it.

    Jay Discount
    Review JK
  • jexy-me Dec 23, 2009 @ 4:07 am | delete
    hi i,m jexy-me nice len and great advice!
  • Leonard Rosen Mar 22, 2009 @ 7:03 pm | delete
    Hard money is more relevant to day than ever before. To learn about hard money and to become a hard money lender, visit our website. We provide national seminard for mortgage brokers and hard money lenders.
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  • MarketingSurge Aug 13, 2008 @ 1:19 am | delete
    Very informative lense. Nice example of what I need to include in my own writings as well. To answer your question about Renegade, we have been going through the E-books and videos since late May '08. My traffic and contacts are really taking off. You should try the free tour of Renegade University. Click here Renegade University for more info. Email us at marketingsurge@verizon.net if you have any questions. Good luck with the real estate and maybe later we will look more into that business ourselves.
  • Catalysthere Aug 8, 2008 @ 1:44 pm | delete
    In this current climate a lot of cash can be made on the backs of people's misery, The Banks have a lot to answer for, but hey, business is business, you could always build up a portfolio and rent back to the people who lived in the property, that way they still keep their home and you don't have to do much to the investment in the short-term.
  • jexy-me Dec 23, 2009 @ 4:09 am | delete
    i agree with you!!
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