Buying a distressed or foreclosed property can be a great way to make huge returns on your investment. You can expect discounts of up to 10-15%. Sometimes, even 30-40% below market value is not unheard of. However, getting started investing in distressed or foreclosed property can be be a daunting task, and can sometimes bring unpleasant surprises.

To avoid the pitfalls, your best bet may be to start by learning from a foreclosure and short sale expert. Please do yourself a favor and visit this site for the ultimate guides to making money with foreclosures and short sales. You’ll be amazed at the complete step-by-step foreclosure training program available risk free!

Buying Distressed or Foreclosed Properties How To’s:

1. Locate your desired area and the foreclosed property.

2. Look up the current market value of the property. This gives you an idea of how much to bid (investors will get a fair idea of profit this way).

3. Try buying from lenders directly. You can sometimes get them to waive certain costs.

4. Inspect the condition of the home (most owners don’t take care of their home if they are in foreclosure). Sometimes a home will require huge repair costs that can potentially offset your profit on selling.

5. Certain states follow judicial foreclosure procedures in addition to non-judicial foreclosure. Know salient points of the law.

6. Meet the home owner and the neighbors a couple of times. This gives insight on the condition, neighborhood and price potential of the home, in case you want to sell it later.

7. Obtain an auction notice from the local authorities (varies by state.) It helps you decide on whether and how much legal assistance you will need in addition to preparing your bid.

8. Fill out the forms after consulting your experienced attorney/agent. Bids often cannot be changed or cancelled once submitted. You will be required to pay an Earnest Money Deposit.

9. Failure to make payment by the stipulated date can trigger cancellation of the bid award. Get financing arranged well ahead of time.

10. Distressed property sales, like foreclosures are good bargains but are prone to be riddled with the pitfalls explained above. Recommended for seasoned buyers, or a beginner with a seasoned agent.

If you are smart, buying a foreclosed or distressed property can be a very good investment!