Christian Aouad Asks: Is Getting A Foreclosure A Solid Real Estate Investment

The Christian Aouad foreclosure report - Like many others I've made some decent money on the rise in foreclosure properties. You can pick some great deals up at auction and potentially make some good profits. But regardless of this I don't like how foreclosures are promoted as the perfect investment for everyone, because they are not. Like most types of investments they suit some people great, yet for others are not the correct path to take.

This is why I wanted to just quickly discuss a couple of things that foreclosures ARE useful for... what you can do with foreclosure properties after you have bought them! I think this will give some people who perhaps are undecided a bit of clarity. If one of these is exactly what you wanted a foreclosure for, then great! Foreclosures may be a great real estate investment opportunity for you!

So what can you do with foreclosures?

If you are looking at foreclosures for investment purposes, you have a couple of options.

1. Flipping Opportunity. If you are not familiar with flipping it is the process of buying a dilapidated house and then fixing it up and selling it on pretty quickly. Foreclosures are pretty suitable for this because they are usually in a slightly shabby state and they are sold for lower (possibly much lower) than an equivalent house elsewhere. Many people are making a lot of money flipping properties at the moment. Just be very careful you are aware of any fundamental issues the house has that may mean extensive renovation. Also, be clear about your budget and the time you want to take otherwise you will eat into your profit. A lot of people buy a property intending to "flip it" but when they get to the end they are so over budget and over their time limit they have little or no profit.

2. Long term rental opportunities. Again, as foreclosures are bought at a low price and usually need small amounts of fixing up, they are ideal for the rental market. People buying to rent are looking to make their money back from rents over a period of time. The low price of foreclosures means that this can be done in a much shorter space of time whilst still receiving the benefit of cashflow. Also, foreclosures are often in lower middle class family orientated areas and this is ideal for the rental market.

3. For first time investor or investors are looking for a first project then a foreclosure is ideal. The low price will allow the first time investor to perhaps spend more money on budget and time when fixing the house up. This is usually what stumps first time buyers so foreclosures are great for this

So 1, 2 or 3? If any of these sound exactly the direction you want to head in with your portfolio then give foreclosures some serious attention. Foreclosures are much cheaper than comparable properties elsewhere in the U.S and you can make yourself some serious profit. For more articles about investment and foreclosures from Christian Aouad visit my website.