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By SHARI FELD

Buy foreclosure, fix it, rake in the dough, right? It’s not always that easy. Arm yourself with research

It’s a complicated and risky investment. You’ll want to study up before you jump in, but here are some basic factors to consider.

To find a foreclosure, you’ll want to tap one of a few key sources.

You can view foreclosure records at the county courthouse. Or you can read The Mecklenburg Times, the county’s business and legal publication. It is available in print or online at www.mecklenburgtimes.com. The Mecklenburg Times and courthouse records provide limited information — basics about the deed of trust, property address and when it will be up for auction.

To find homes available from the U.S. Department of Housing and Urban Development, go to hmbireo.com. The HUD site provides more detailed information, listing the house’s size and year built and room information, such as number of bedrooms and bathrooms. It also lets you know if a property has been sold and for how much.

A local real estate agent with foreclosure experience can watch for soon-to-be-listed and newly available properties and ensure you are not chasing an already sold house.

To bid on a HUD home, you must work through a HUD-certified real estate agent. Its Web site lists agents by area.

Research the property before bidding.

The amount of research you can do depends in part on how you will be purchasing the property. If the house is being sold at a courthouse auction, you won’t be able to see inside it ahead of time. Of course, you can do a drive-by.

If the house is being sold through a broker or through HUD, chances are you can get inside.

Either way, you might not get the full picture on the property because you won’t be able to ask the former owner questions, such as when the kitchen was remodeled. Try asking neighbors instead.

Research the neighborhood.

“It is somewhat hard to compare apples to apples with foreclosures,” said Robert Gates, owner of Gates Real Estate and Auction Group in Lincolnton and a foreclosure buyer. Look up tax records for information on the size and value of the home and the lot you are considering as well as past sales in the neighborhood. This info will help you determine if you are getting a good deal.

You may have to weigh a property in an area that has had steady growth with a one in an area that could stay stagnant or flourish.

Talk to a lender before bidding.

It might be harder to get financing for a repossessed home because the bank is taking a bigger risk than it would in a standard home purchase. The rate on your loan likely will be higher than it would be if you were purchasing the house as your primary residence.

Hire a lawyer to do a title search on the property.

You want to make sure that no prior owners have a claim on the property. Later, if you decide to buy the foreclosure, you might also want to purchase title insurance to protect yourself from other claims on the property.

Hire a home inspector — if you have access to the house before buying.

Keep in mind foreclosed properties are sold as is. You will want to know if you could be on the hook for major repairs. Before you get your heart set on the house, know that repairs could be significant.

“If (the previous owners) didn’t have money to pay the loan, they didn’t have money to take care of the house either,” said Irl Dixon, a broker for Coldwell Banker Real Estate Corp. in Belmont.

If you end up buying the property, you might also want to get a home warranty to cover unforeseen repairs for the first year or so.

To make your bid, contact your agent or head to the courthouse.

If you plan to flip a HUD house for profit, remember that you don’t get first dibs at auction. The first 10 days of the auction period are reserved for people shopping for their primary residence.

If you are going to a courthouse auction, you can either go on the day the property is auctioned or wait until after the auction and top the high bid. Each new bid must exceed the former bid by 5 percent. The property closes when there are no upset bids for 10 straight days.

Many real estate investment veterans say that courthouse auctions are the riskiest investment for inexperienced investors. It can be a challenge to pit yourself against seasoned pros and come out ahead.

– WRITER AMY BALDWIN CONTRIBUTED.

Learn More

To learn more about investing in foreclosed homes, check out:

www.boynecityrealty.net and www.patobrien.com  

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