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How To Buy Homes At Trustee Auctions And Flip For Profit



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By : Seth Phillips    99 or more times read
Someday history may define 2010 as the greatest real estate wealth building year ever. You can easily understand the concept that following one the biggest and fastest real estate market declines that the upside of the next appreciating market cycle is HUGE.

This article aims to provide you with a brief outline of the steps to success in foreclosure home flipping.

Is there a chance to make money right now? Yes, this is an excellent time to buy homes at greatly reduced prices and re-sell (Flip) them for profit. Thousands of homes are sold at trustee auctions everyday and anyone can buy them.

The trustee sale is the last part of the foreclosure process. All notices have been given and the owner has not been able to get current on the mortgage payments. Now the property is sold at a public auction to the highest bidder and the lender sets the minimum bid up to but no higher then the actual amount owed on the existing loan.

In most areas these sales are all cash only. Unlike a traditional sale these auctions are as-is, where-is, buyer beware sales. Of course you must do your home work or you will get hurt. The most crucial upside to that is the competition is greatly reduced thus the substantial discounts.

Listed this is the partial list of the items you should evaluate before you buy.

  • What are other similar homes selling for in the immediate area

  • What title conditions exist such as back taxes owed

  • What will it cost to refurbish the home to get maximum value

  • Is there a good re-sale market in that neighborhood

  • What are all your costs such as closing costs, taxes, commissions

  • If you make a mistake can you afford it

I hope you get the picture that this isn't a risk free strategy. You must do your home work. You must have some money to sell to. And you must have courage.

That said there is big money to be made if you carry it out right. For example in my primary market (Los Angeles) every day there are many properties sold with $100,000 to $150,000 margins between the buying price and the now market selling price.

This is no exaggeration. You can check with public records to verify this. Realty Trac is a national company that gathers extensive information on foreclosures which will be an invaluable tool in your success. Among the services they offer is notices of upcoming auctions. You will require this information in order to pick out the homes of interest to you and begin your research.

Thoughts is broken confident you know your numbers you will demand auction site and bid. You have to visit the auction site several times before you would like to bid to obtain a feel for the process. The auction sites are regularly in a few different locations and you may see the same auctioneers representing the trustees for the lenders there. You can ask them questions and the nice ones can be very helpful.

You will likely be required to have cashiers checks and you must register with the auctioneer before bidding. Pay attention as the property can be called at any moment and when you miss it you simply must find another home and start once again.

If you win one congratulations. And if you donít you will have another opportunity and then another. The foreclosures will keep coming for a time but eventually they will dry up and the opportunity will go away.

There are many ways to make money investing in real estate. There are lots of more ways to lose money investing in real estate. There is one strategy you can count on perhaps the most simple of all. Buy At the end. When you buy at the bottom sizzling hot is UP!

So check it out have a look and jump in. This could truly be a rare opportunity to make some great money flipping homes.
Seth Phillips
Real Estate Licensed Investment Specialist


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