Buying foreclosed real estate is a very hot trend right now. It’s a great way for investors to find fabulous deals on property in their area that are selling for below market prices.

If you are new to real estate investing, you may wonder why buying foreclosed real estate is such a big deal and if there is a catch. With the tough economic times that we have been experiencing, many people have lost their jobs and have been unable to keep up the mortgage payments on their homes. After they get so far behind, the bank or financial institute holding the note forecloses on the home.

The problem is that the majority of these institutions don’t want to hold these properties. It’s a logistical nightmare for them to keep the house in good shape, keep the grass cut, etc. until they get them sold. So, they are looking to unload them quickly and cut their losses. The bank doesn’t usually ask full price for the house which is why buying foreclosed real estate is such a great deal for real estate investors.

The professional investor can step in, offer to buy the property and take it off the bank’s hands. A savvy investor will make a very low offer at first and see what the bank says. Many times they will counter back to get more money but in the end, the investor usually ends up picking up the house way below market price.

But, how do you know if buying foreclosed real estate offered in you area is a good investment? The first step is to get a free foreclosure list so that you can see what properties are being offered for sale. In my area, sales are held twice a month at the court house. Not every house listed is going to be a great deal so beware. If you find any properties that interest you, do your research and find out what other properties are selling for in the area. You will need access to the MLS to do this or you can find a realtor willing to help you out.

I would not recommend buying any houses until you are very familiar with home values in your area. Buying foreclosed real estate can be a great way to pick up under valued properties. However, it can also be a way for you to get stuck with a property that you can’t get your money out of. In most areas you get the chance to view the property before the sale. At the very least, drive by the homes you are interested and see what they look like. Check to see if they are still occupied because you will have to get the people out yourself if you buy the house. They may not be happy about being forced to move and they may actually tear up or strip the house in the process of moving out.

The best advice that I can give you before you jump in and start buying foreclosures is to do your homework. There are some great deals to be had at these sales and now is the time to buy before the housing market recovers and prices go up.

For great articles and tips on becoming a real estate investor or if you just have an interest in learning about “All things Real estate Investing”, Innovative Property Solutions has it all. Sharon has been investing in real estate since 1998. She has been a full time real estate investor since 2008 and is passionate about real estate investing as a way to build wealth.

For more information on how to successfully buy and flip REO properties, click here.

You can also Check Out My Blog to get more information on how to flip properties and how to find wholesale properties.