Investing in Real Estate Foreclosures in Winston Salem, NC

Foreclosures are at an all time high. Not since the Great Depression have so many people lost their home. This has created one of the most incredible investing opportunities in real estate in many, many years. Regardless of the vehicle, what do most experts say about investing? "BUY LOW & SELL HIGH." However, what do most people do? JUST THE OPPOSITE!! "BUY HIGH & SELL LOW!" Though most foreclosures are distressed, they do offer a chance to "BUY LOW & SELL HIGH". As a Realtor specializing in foreclosure properties, I help investors, first time home buyers or folks just wanting to move up to a bigger & better home find GREAT DEALS in foreclosures.

I will briefly describe how the process works. Once a home owner goes into default on his mortgage, the property is sold at the local courthouse. If the high bid is not acceptable, the property reverts back to the bank and becomes an REO (Real Estate Owned by the bank). Once the bank has reclaimed the home, they usually hire a real estate agent to help them market & sell the property.

Most foreclosures are sold BELOW MARKET VALUE, because they are sold "AS IS". They can go for LESS than list price and often do, but the LONGER the property has been on the market, the BETTER chance you have of getting a GREAT DEAL. Because most REO properties are distressed, the buyer, in most cases, must have a vision of what the home can potentially become. The worse condition, the better opportunity for "BUY LOW & SELL HIGH"

Here are a 5 steps you should take to find awesome foreclosure deals.

1. YOU MUST BE PRE-QUALIFIED FOR A LOAN OR HAVE PROOF OF FUNDS if you plan to make a CASH offer. To get your PRE-QUAL letter you will need a few things
* W-2 forms full 1040 tax forms if self employed).
* Paystub's to cover a full one-month period.
* Your most current bank statements for 2 consecutive months.
* Signed application forms and credit report authorization.

From my experience, banks are more likely to accept a CASH offer, even if it is SLIGHTLY LOWER than a FINANCED OFFER.

2. FIND A GOOD LENDER WHO CAN PROVIDE FUNDS TO HELP YOU REHAB THE PROPERTY. As I mentioned earlier, most foreclosures are distressed, so if you are financing your purchase, your lender must know you are buying a foreclosure ESPECIALLY IF THE HOME IS DISTRESSED. BANKS, MORTGAGE BROKERS, PRIVATE FUNDS or even HARD MONEY LENDERS can be sources of capital.

3. FIND A REALTOR WHO SPECIALIZES IN FORECLOSURE LISTINGS. Buying a foreclosure can be a little tricky. If you get in a multiple bid situation and your Realtor is NOT familiar with the process, you could miss out on a great deal. A Realtor in the know, can provide invaluable tips to help you GET THE PROPERTY YOU WANT AT THE PRICE YOU WANT. He or she should have FORECLOSURE LISTS, which they can provide by EMAIL. This will SAVE YOU GREAT DEALS OF TIME instead of doing manual searches. He/She should know the local market and be able to provide recently SOLD COMPS or RENTAL ESTIMATES

4. BE ABLE TO CLOSE FAST! Banks like for you to get things done quick (though they don't always return the favor!). If you can close in 15 days instead of 30, you stand a better chance of getting your GREAT DEAL. Once your offer is ACCEPTED, there is a minimum EARNEST MONEY DEPOSIT (EMD) of $500. You must have a copy of your EMD check to make the offer, and once it is accepted you have 3 banking days to deposit with whoever plans to hold it. Most of the time the CLOSING ATTORNEY will hold the EMD.

5. DEVELOP A LIST OF CONTRACTORS WHO CAN PROVIDE INSPECTIONS/REPAIR ESTIMATES. Most contractors will provide a FREE REPAIR ESTIMATE, which can help you determine your OFFER PRICE. If you don't know honest, respectable contractors, you can find most of what you need at ANGIE'S LIST (www.angieslist.com). This site provides reviews from people who have actually used the contractor, so you can have peace of mind knowing the person/company is good to deal with or not.

Obviously, there are many other things to learn about investing in foreclosures, but this will give you a foundation on where to start. Look for a MENTOR or local REAL ESTATE INVESTMENT CLUB to help you learn more.

ABOUT THE AUTHOR: Tony Green is an experienced Realtor® specializing in Bank Foreclosures. Visit www.TriadNCHomesForSale.com and request to be added to his FREE email list of local REO properties in the Piedmont Triad of NC. He can also be reached at (336)287-4423.">