I live abroad and have some cash to invest in a foreclosure in San Diego, CA where I used to live. I would like to purchase a house/condo, rent it for while and sell it back when the market is ready again.I would like to know how I should proceed. Signing up to foreclosureradar.com is my first step, but then should I pay a lawyer? A real estate agent? What are the risks? How to proceed to negotiate during pre-foreclosure? What are the points I need to pay special attention to? What are the risks?It is pretty difficult to become proficient in the US real estate market and way of working from abroad …Thank you in advance
Hi, and thanks for signing up. I don’t think a lawyer will help you much, an experienced agent is a better bet. That said, you will need to be extremely careful about the agent you select, especially if your goal is to save some money buying a foreclosure.
Agents by and large are going to stick to foreclosures that are also listed in the MLS. Buying an unlisted preforeclosure directly from a homeowner is a tough strategy at the moment, because most foreclosures have two loans and are upside down (they owe more than the house is worth). Even listed preforeclosures require some patience to give the lender time to approve a short sale (where the lender agrees to take less than they are owed).
Buying at foreclosure auctions can be good right now, however, most agents won’t represent you at auction. And there are enough risks that I don’t recommend this strategy just to buy one property.
Your best bet is likely buying REO property. Using ForeclosureRadar you can see what the banks are taking back weeks or even months before they get listed. This gives you plenty of time to research the property so that you can be ready to submit an offer the moment they are listed. We have an investor that does this quite successfully.
Be really careful when you choose an agent. While we have some amazing agents and brokers in California, the licensing requirements are so minimal the fact they are licensed is practically meaningless. Get references. Read blog posts. Ask for a history of transactions. Make sure they know their market, including all foreclosure and new home inventory, not just the MLS.
With the dollar at all time lows and home prices here tanking it is a great time for folks abroad to consider investing.