Now that you have decided the time has come to jump into the real estate investment game, the next trick is learning where to find investment properties. Thisis not always as easy based on the type of market. For example, during a buyer’s market, the number of available properties tends to be low. On top of this, if you have specific investment interests, these will only add to the challenge.
On average, it takes 30 days or less for a “good” property to sell, which means you need to have more than one way to locate investment properties. One such wayis to make use of real estate auctions. They tend to be a great way of leveling the playing field by allowing you to compete against anyone and everyone who wishes to buy the property. Consider these tips if you are considering real estate auctions as a way to locate investment properties.
1. Make Friends with Your Local Banks
Many of the homes being soldat auction are bank foreclosures. The lender is interested in making a quick sale that will help them recover at least some of their investment. Sometimes, depending on the equity in the house, you can get a terrificdeal on property at this type of auction. Take a little time getting to knowyour local banks and the people who handle foreclosure sales. You never know, they might be kind enough to let you know when they have properties going to auction.
2. Know Your Market
How can you know if a property is a good investment if you don’t know what the local market is like? Buying real estate at auction is in part popular because there is no need to negotiate terms. But, if you don’tknow your local market, what might sound like a good deal to you could leave you deep in the hole by the time it’s all over. Study local listing sites, visit local open houses, look at the condition of the homes in the area. Basically,get to know your market before you start risking your hard-earned money.
3. Get to Know Your Local Contractors
When you buy a house at auction, it comes “as-is.” If you aren’t familiar with the costs of repairs, upgrades, and any commonpotential problem areas, you need someone who is. For example, if the ceilings look like they are readyto cave in on you, you need to know how much the repairs are likely to cost so you can add this into yourcost calculations. Take a little time to get to know afew of your local contractors, have them give you estimates on the repairs you can’t do for yourself. A little networking might save you from making a serious mistake or could help you land that perfect deal.
While real estate auctions can be an excellent source of investment properties, they only work if you know how to approach them. Taking the time to educate yourself first will at the very least, keep you from making too many poor investments.