Buying Foreclosures

I remember buying my first investment several years ago and boy did I have a lot to learn. My first FLIP was a single family home in Lanham, MD. We purchased the home at a courthouse auction for $275,000 and sold the property for $355,000 about six months later. Sounds like a great deal doesn't it? Unfortunately, after fix-up costs, carrying costs, realtors commissions and settlement costs we made a whopping $5,800!! I quickly remembered all of these late night infomercials advertising how we could get rich by flipping houses. The worst part was that this was during a Bull Housing Market. I have since bought many foreclosures and have made some money and lost some money. The bottom line is that IT IS NOT THAT EASY. If you are thinking about spending money on some cd's while watching TV late at night, please send $5 to me and I will save you a couple hundred bucks and a lot of headache. Investing in Real Estate ISa contact sport. You need to be patient, set reasonable expectations and most importantly work with an experienced agent or investor. I always recommend that new investors start with townhomes or condos. Whatever you do, do not start with that home in your neighborhood that has been sitting neglected for several years. These money pits can be a big time loser for the novice investor. Look for "paint and carpet" deals. the kind of homes that are 60-80k under market that need cosmetic work. These deals have less profit potential, but also carry less risk. Remeber, start slow, build a network of contractors and learn your numbers. Once you have this down, then you can move on to the larger deals. On another note, do not pay for a list of upcoming foreclosures or houses that are in foreclosure. Sites like Realty Trac or other foreclosure sites charge money for information that you can get for free. If you would like a list of Free Accurate Foreclosure Sites, or would like to receive a list of foreclosures and possible investments in Anne Arundel County Maryland, please visit www.THINKNEWMAN.com or drop me an email at jnewman@kwflagship.com