With the right combination of strategy, knowledge, and luck, flipping houses can create big profits for short-term investors. However, your path to success starts at your first auction.
For first-timers who are intimidated by their lack of experience at public auctions, follow these steps to ease the confusion of your first property purchase.
Locate Auctions In Your Area
Finding live auctions is as simple as an internet search. Websites run by government agencies list homes that have been seized due to tax liens or foreclosures. Try searching databases maintained by:
Another option is your local newspaper. Banks publish foreclosure notices in the public notice section. You can also find advertisements from auction companies and information from the sheriff's or county tax collector's office that helps you hunt down low-cost properties.
For busy investors who plan to use real estate as an extra income, it could be worth your while to enlist the help of a professional real estate agent. They often keep lists of homes in foreclosure in the surrounding area.
Assess Available Properties
All properties are not created equal. To find the right fit for your project, find the following information for each potential listing.
This information isn't always readily available. You may be able to find more information via an MLS search, public lands records, or various real estate websites that publish property data. Of course, if you're working with a real estate agent, they will provide all the data you need to make the right decision.
Some auction sites include pictures and map data. At other auctions, bidders may be allowed to visit the property or hold open houses before the sale occurs.
Perform A Title Search
When you've found a few properties that you like, take some time to do a thorough title search. This process ensures your property doesn't come with some unfortunate surprises.
During your search, you'll need to:
Once a property has cleared these steps, you'll be ready to start placing bids on your first investment property.
Last but not least: Don't overlook your financing options. Be sure to meet with your trusted home mortgage professional to get your pre-approval in place. This important step will help you create an affordable budget.