But is it really a bargain?

I know that some of you out there are considering buying a foreclosure property as an investment. If you have the ability to do so, I highly recommend it as there are some unbelievable bargains available right now. Yes, you can get a mortgagage loan and at bargain rates to rival the bargain price of the distressed property. The rental market is quite strong right now too, so for the first time in a long time it's possible to buy and rent out with a positive cash flow after expenses. So, what you are doing is building equity with someone else's (the tenant's) money. Yes, a rental takes some work and rental property management is not for everyone. I've done it and it can be tedious, but in this market the profitablity is well worth the effort.

But are all foreclosures bargains? Definitely not. I recently looked at properties in Valley Center, CA that are between 1,500 and 2,500 square feet. They were about 75 of them and many were either "short sales" where the property is being sold by the owner for less than is owed on the property with the lender's participation and approval of the sale, and foreclosures, where the lender is in possession of the property. The sales price per foot of these distressed sales ranged from a low of under $200 per foot to a high of around $259 per foot. There were about 10 in the $200 per foot range and these are the bargains and signifigant bargains at that. Even as recently as 2006, homes in Valley Center sold for as much as $320 per foot, and anything close of $200 per foot was simply unheard of and completely unavailable.

Not every foreclosure is a bargain. You have to have a thorough and competant home inspection and determine what, if any, repairs need to be made and at what cost. You have to compare the property and its overall value and price per foot value with recent sales in the area. The more immediate the area the better. And, if you intend to rent out the property, you have to compare the rental value with other similar properties.

Sound confusing? It's really not complicated and it's my job to provide you with all the information you need to make the decision that's right for you. Please call on me to answer all of your real estate questions, whether buying, selling or investing. Together we can find the answers and it is always my pleasure to serve your real estate needs. To read more, here is a link to MSN.com with lots of helpful information.