Investing in Foreclosures Successfully in a Changing Real Estate Market

When I first got started in real estate investing over a decade ago, foreclosure investing was a very different type of real estate strategy than it is today. I would show up at bank auctions with a pretty clear idea of how much money I was willing to spend on a given property. Then, when that property made it to the block, I would maybe compete with one or two other investors – if that – to get my hands on properties that I believed represented potential profits for me and my business.
However, as time passed those auctions got more and more crowded. Increasing numbers of investors started attending auctions, and the auctions were no longer the “insiders” arena that they used to be. That was when I started using other methods to find foreclosures, such as working with other real estate investors and targeting motivated sellers to get the job done and find properties that I could use to make a profit.
Today, the scene is different once again. As you probably are hearing on the news, even with massive auctions banks and lenders are still holding far more real estate than they are prepared to handle and due to the alleged “credit crisis,” they are having a hard time even finding people solvent enough to buy their properties. As a result, these auctions are still often full of interested investors in all stages of their involvement in “the game,” but few are really equipped to fully take advantage of the opportunities that this type of situation represents.
In my experience, changing markets are the best time to get involved in real estate. When a market is predictable, people everywhere figure out how to work the system and generate profits. However, in the newly dynamic real estate investing market of today, there is no permanent “system” that will make you money. Instead, you need a vast array of information at your disposal. For example, I have worked with investors who never pay more than 25,000 Dollars for a house, but buy a minimum of 8 houses at a time. They are able to work with lenders in a way that single-property buyers cannot because they have the ability to take a lot of foreclosed properties off that lender’s hands, and they often sell those houses at a 200 to 500 percent profit by the time they are done with the deal.
Strategies like this one may not work forever, but today that particular partnership is literally generating millions of dollars for all the people involved. Of course, this type of creative thinking requires some pretty serious methodology as well. You need to know what type of lender and what types of properties to target. For example, that particular group has identified the exact characteristics a house needs to sell in today’s market and can spot those characteristics no matter where that property is located or what condition it is in. They swoop in on these properties (which are often really undesirable at first glance) and make offers that the lender really cannot afford to refuse.
The key to success in foreclosure investing in this changing market is making your strategies work no matter what the state of the economy. My experience in real estate investing has never been more beneficial to me personally than today, when a repertoire of experience and education is the only thing that enables me to be flexible enough to keep up with foreclosure investing no matter the state of the economy or the mindset of the times.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com.

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