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How to Find Foreclosures, For Investing, In Your Spare Time
How I Found House #7
How to Find Foreclosure Properties is a series on how I find, fix and flip House #7.
Want to make money with foreclosures but don't have a lot of time?
Well, I am going to use my most recent investment, House #7, and show you how I did it. Most people think that to find foreclosure properties you must either be an agent, have an agent or pay to use one of those foreclosure tracking websites.
I am here to tell you that back in 2009, when there weren’t so many, I learned how to find foreclosures on my spare time using only the internet and some driving around. Better yet, as you will see from House #7, Atlanta foreclosures are a dime a dozen, however a foreclosure that would make a good investment candidate is a whole other thing.
You need to watch out for this. Many people and real estate agents think: foreclosure = good deal
I have seen this line of thinking lead buyers and would be investors to pay too much for a property. How do I know?
I am one of them .
When I look back at House #1 I now realize I paid too much for two reasons: I was inexperienced and so was the agent I was using. Even though the house has been rented from day one and cash flows every month I now realize I should have paid less.
House #7. Pretty ain't she? NOT...yet...
However, fast forward to the present and when I think of how to find foreclosures for investing this is what I recommend you do and it is how I found House #7. You do not have to devote 20 hours a week to find foreclosure properties that would make good investments if you do the following:
Pick an Area
Before you can start searching you need to know what you are looking for so you can find it. Just saying, “I am looking for a good deal…” will not help you out. The best way to get started is by picking an area, just like you see in the map below and then start working that area
This map shows all the areas I have invested in. For House #7 I am moving away from the purple areas and focusing on the pink area for the reasons you will see below.
You have to have a good reason to pick your area. For example, Atlanta is a huge city and Atlanta foreclosures are in the thousands. I know many of the popular investment areas are not the ones you see in this map. But I chose to invest in these areas for three main reasons:
- They were on my way to/from where I worked. That made it easy for me to get to know them since I was driving around them every day.
- They had abundant properties at a price range I could afford. It was realistic that I could buy something at $45,000 - $65,000 that I could then sell between $100,000 - $135,000.
- They had numerous desirable areas. Good schools, low crime, houses were selling, good access to highways (which is crucial in the brutal Atlanta traffic), no war zones, neighborhoods with more owners than landlords and so on.
This map shows all the areas I have invested in. For House #7 I am moving away from the pink areas and focusing on the purple area for the reasons you will see below.
Have a Criteria
This means that if someone asks you what you are looking for you can answer in 30 seconds or less.
This is what my criteria looks like for House #7: “I want a 4 bedroom, 2 bath house or if it’s a 3/2 it has to have a basement or some other bonus room that
I can turn into a bedroom. I am looking to resell this house, not rent it, so I can put up to $40k in repairs/upgrades, it has to be in the Taylor High School area, no structural issues, almost any other problem is Ok and I will not pay more than 50 cents on the dollar (half of what I think it might be worth when I am done with it) up to a $100k purchase price”.
House #7 met this criterion completely and five minutes after I looked at it for the first time I was ready to make an offer.
Having criteria will allow you to sort through investing opportunities, discarding those that don’ t fit your criteria and allow you to focus on those that do. It will also help others point you and/or help you find what you are looking for.
Go to Part 2 of How to Find Foreclosures >>
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