Buying foreclosure properties is getting more popular and more profitable every day. There are dozens of foreclosed properties hitting the Knoxville market every week. The reality is, however, that foreclosure properties can be both gold mines and land mines. In this article, we’ll go over several simple tips to help ensure that your first foreclosure purchase is a successful one.
Search for Low-Repair houses for Your First Deal. We’ve all heard about people who make thousands of dollars buying foreclosures and fixing them up. Doing such a deal requires a high degree of expertise.
Do you know how to fix a worn-out roof? Can you estimate how much it would cost to replace the HVAC system? Can you estimate how much the repairs will cost and compare it to your selling price in the end?
Although you can make a lot of money doing fixer houses, you can also make a lot of money by buying foreclosed properties; making cosmetic repairs and selling them again. For your first foreclosure deal, try and look for houses in Knoxville that don’t require much work so you can get some experience under your belt.
Research the Knoxville Homes Market. There are generally three reasons to buy a foreclosure property:
1. To rent it out
2. To sell it
3. To live in it.
If you’re buying to repair and rent out or sell, then market research is absolutely essential.
If you’re buying to rent, it’s important to know what other properties in the area are renting for. It’s also important to know what the vacancy rates are. Based on these numbers, you can accurately predict what your cash flow will be like.
If you’re buying to sell, it’s important to know what you can expect to sell your property for once your repairs are completed.
You should know these numbers before you make your purchase. Remember, with real estate investments, the profit you expect to make on the deal is made on the buy end, not the sell end. You must know how much your property is worth or how much you can rent it out for before you can make a profitable investment decision.
These tips will help you avoid some of the biggest pitfalls beginning investors tend to fall into with their first investment properties. Foreclosures in Knoxville can be a very lucrative business, but it also has its dangers.
A complete list of Knoxville foreclosure homes is available to you by visiting the Knoxville Foreclosures website.
David Hamilton
Ferguson Realtors
8085 Kingston Pike
Knoxville TN 37919
865-310-0636 Cell
865-690-1300 Office
800-747-0713 Toll-Free