Making money from foreclosures

We seem to hear so much about foreclosures these days, most of us know at least one person who has had their house foreclosed on. Drive into almost any neighborhood and you will find at least one foreclosure sign.
It's no wonder really, most Americans spend what they make and more. We want it all, we max out our credit cards and sign up for so many payment plans till we can barely see straight. We struggle to make ends meet and then disaster strikes, divorce, we lose our job, or any number of things can happen.
Whatever the reasons, there are a great deal of foreclosures on the market these days. So, what does that mean for the average person looking to find a good deal on a house or the person trying their hand at making a little extra money on flipping houses? It means there are some great deals to be found out there.
We sort of stumbled into the foreclosure market about 2 years ago. The housing prices in our current neighborhood were at an all time high and we had already been considering a move for a number of reasons, school districts, getting closer to the grandparents, needed more space and wanted a swimming pool, and on and on.
We decided to put our house on the market and our realtor said he had just purchased a foreclosure at a great deal and we should consider it. So we set our sites on finding a great deal.
We started doing some research and started looking at some houses. Now, you can find some foreclosures in great shape, but your not always going to get the best deals on these homes. You have to start looking at the houses and seeing the potential they have to offer.
Some houses just need a little cleaning, maybe a little paint or new carpet. Other homes have just been destroyed beyond repair. One home we looked at was in a nice new golf course community, great price, plenty of square footage, a swimming pool and only about 5 years old. It was priced way below market value. But at closer inspection, we realized the foundation was bad, very bad!!!
We finally did find a home perfect for us and in the exact area we had been wanting. However, perfect for us, did not mean move-in ready. But we did see the potential in it. You really have to take a lot in to consideration. Our house had been stripped of almost every light fixture, dishwasher, above the stove microwave, bathroom mirrors and oh yes, even the kitchen sink. But it had a great foundation, and no major damage. So we just had to replace some fixtures and few other things, re-carpet the downstairs and put some paint on the walls and we were back in business.
But, we had done our homework. The area we were moving into is a new up and coming area, growing very fast, so we are speculating the prices will go up very shortly. We also priced out the house values for homes of similar square footage, built about the same time as ours and found that it was already priced $20,000 below market value. We then took into consideration the money we would have to put into it and offered the bank, that now owned the house, $20,000 less than their asking price. That's $40,000 under market value. And they accepted.
You see, Banks aren't in the business of selling houses, they are in the business of making money. We quickly learned if your offer is more than what is still owed on the house, they will more than likely bargain fairly with you. They just want to make their money back. So, in the end we paid $40,000 under market value, invested 15,000 to get it back in good condition, and now have $25,000 in equity in our home.
So, if you were wondering if the average person out there could make money buying and selling foreclosures, the answer is YES. You don't have to have years of experience in real estate or have a realtor's license. It's actually not that difficult and we had a lot of fun at the same time. Just make sure you do the your homework and learn everything you need to know before you start because there are some great deals to be had out there.
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