Foreclosure Homes: Is Now A Good Time?

So, now that you have made the decision that the place to invest is in foreclosed properties, you have one more thing to do. You have to locate the appropriate foreclosure properties. There are lots of places to start your search for this kind of property, and I have 2 very general classifications: government foreclosures and bank owned real estate.

There are a number of sources you might consult to learn more about government foreclosures. The Department of Veterans Affairs is one starting point, as is the Department of Housing and Urban Development. You might also look into the General Services Administration and see if the Office of Property Disposal has any listings. Other resources include the Treasury, Small Business Administration and Agricultural Departments, law enforcement sources such as the Marshals Service, and banking sources such as Fannie Mae and the FDIC.

Regarding bank REO properties, often, banks will have REO lists on their Internet page, and you can even find these banks on the Internet as well. Asset management companies also often list bank REO properties. They work to assist lenders to get rid of assets, and so they often have REO properties for banks that are their customers on their Internet page.

It is also very important to look at pre-foreclosure properties as a possible source for your investments. To be able to capitalize on this option you really need to have a decent understanding of the foreclosure process. But at various stages of the process notices are recorded with the County Clerk and these public records may be searched by anyone which gives you the possibility of locating properties that are heading towards foreclosure. You can then approach the owners about acquiring the property prior to foreclosure and help them out of a sticky situation.

As is required, the Notice of Sale of a foreclosed property must me published in the newspaper. You will find notices for trustee sales in the Public Notices section of the local newspaper. It is important to be thorough with your research when you buy at trustee sales, therefore it may be better to be aware of properties before they reach the public notice stage of the foreclosure process. Exercise caution as properties are sold “as is-where is”.

It could be well worth your while familiarizing yourself with the county website for your target market to see what resources they offer online for researching foreclosures in that market. This could be useful whether you are interested in acquiring properties via pre-foreclosure or at foreclosure auctions on the county courthouse steps.

So you can see there are many different sources of foreclosure properties and I encourage you to use multiple sources rather than just subscribing with one online foreclosure database. If you are reviewing the inventories of a few banks, asset managers, several government departments and the county clerk you will have a larger range of properties to choose from. And this will obviously give you a big advantage over other investors.

At some point, you may have made the decision to begin foreclosure investing, but you haven’t yet started since you don’t yet have foreclosure listings. Two key groups of listings include government foreclosures and REO sales. It is useful to think in terms of two groups as there are numerous ways to identify properties. Explore several sources as opposed to one database. If you expand to include the listings of a few banks, asset managers and government agencies and the county clerk you will have a more varied range of listings to chose from. And this will give you an edge over others.

- David E. Williams