How Investors Buy Real Estate

Have you ever wondered how real estate investors continue to generate great income in just about any market conditions. What are they doing that you’re not? We look at the same properties right? Wrong!

With a few exceptions here and there, real estate investors who purchsase properties with the intent of improving them for resale don’t generally purchase homes the way you and I do. So where do these properties come from? Trustee Sales.

A Trustee Sale is the sale of a property that has gone through the foreclosure process and is being offerd for sale in an auction like setting. Should there be no bidders due to a high starting bid the property would then revert back to the foreclosing bank or lender which will then become a bank owned property and be marketed for sale to the general public much like any other property for sale.

Many investors prefer to purchase property through Trustee Sale for a number of reasons.

1. Price
There are many deals to be had at Trustee Sales since the banks are not in the business of owning or selling property the starting bid can be quite attractive for investors looking for money making opportunites.

2. Time
A Trustee Sale is the fastes way to aquire a property. Following your succesful bid of the property you are now the owner. No waiting to close escrow. Leaving the investor the ability to go straight to work in fixing up their newest investment.

As attractive as Trustee Sales sound, there are many pitfalls one must be aware of before taking on this venture. Besides the cash only requirement to purchase these properties, it is importnant to know that there are no garantees of what you are actually buying. You may be faced with several years of back taxes which are now your responsibility, the need to evict the former owners which takes time and then there is the condition of the property which in many cases is a guessing game which can severely back fire on you should there be unexpected costs such as a cracked slab or other major issue.
Needless to say, this is not something to be taken on lightly and is not suitable for all.