By: David Fritz
The news often highlights the cities with the most and heaviest discounted foreclosures. But when considering a real estate investment is this really where you want to look? Not according to Forbes magazine. At first glance, cities with the heaviest discounts may seem promising but bargain prices in “flimsy” markets do not make a wise investment. As Forbes says, better to look at cities and towns with strong economies and a relatively stable housing market. Using this yardstick, Raleigh was recently rated #2 in a list of the 10 best places to buy a foreclosure.
Makes sense. An often heard comment from local real estate agents is, “I have clients ready to buy if only they could sell their home in Ohio, New York, etc.” Employment opportunities and quality of life are dominant themes drawing families to the Raleigh area. Wow, it’s a good place to put down roots, maybe that makes it a good place to invest in real estate… BINGO!
Having decided on the area, then it’s down to the basics. Do your homework, check out the neighborhood, schools, shopping, and parks. If this is a rental investment, consider a neighborhood with only a few rentals which tend to be more stable, more desirable and have better appreciation rates. Check the county records for the number of mailing addresses that are different than the property address. Does the condition of nearby homes support the improvements you will need to make? Comparing recent sales prices against your planned offer price is a good way to begin.
In the future look for:
- How financial institutions handle the foreclosure process
- Getting a handle on repairs: cosmetic vs. serious damage
- Is buying a foreclosure for you