Eddie Starr ⋅ Spokane, WA U.S. Navy, Seaman ⋅ 4 years served

In addition to any local REIA clubs/meetup.com, you may want to look at biggerpockets.com, as a decent forum to learn from.

You mentioned foreclosures and $30K. It's not entirely accurate, to say there's "nothing there." It depends on you're market. Also, would you be willing to entertain the idea of buying foreclosed mobile homes, and renting them out? In fact, on the BP forum mentioned, there are several discussions on just that topic.

Another options include buying tax deed/tax liens. In this, you buy, at auction, the cost of the taxes, which bidding varies not only by state, but sometimes county and city. Sometimes, what happens, is you buy the taxes, and the person then pays off the taxes, plus interest, which is where you make your money. If, on the other hand, they can't pay the taxes, then you can foreclose upon the property, and resell it. Make sure that you know what your bidding on, and not just buying a strip of land!

Instead of buying a home, you may want to consider buying the note, that is to say, the mortgage of the property. One of the more suggested methods is to find someone who sold their home with seller/owner financing. Then, you offer to buy the note--in part of full--from the note holder for a discounted amount of cash, so that you can collect the payments + interest, over time. There's also buying nonperforming notes, which are those that aren't currently paying. Those can be super cheap, BUT unless you know what you're doing, could cost you more than the cost of the house!

Yet another option is to focus on the "preforclosure market." This is the houses that have not actually been foreclosed upon by the mortgage holder. There are a lot of options here, as well. For example, you could focus on these properties, especially those whose mortgages are over leveraged, aka, "under water"--and put it under a lease option. This is where you'd put a little bit of earnest money in, and hold then look to put a buyer tennant in; the person who then leases the home, with an option to buy it after the lease term. This is similar to the concept of wholesaling, but with a share of differences. I actually work, on occassion, with a guy who specializes in this, and would be willing to JV with a fellow vet, if interested.

Pat Godfrey ⋅ Saint Louis, MO Oasis Outsourcing ⋅ 30 years experience

Look for local real estate investing groups in your area. They usually hold monthly meetings with a speaker and you meet a wide variety of people in your community doing what you are doing. The networking alone will help you find deals that may not come to you in the normal course of business. We invest part time and rent the properties for passive income. To really be profitable you need to be able to maintain the properties yourself. Contractors take too big of a bite out of profit.

Thank you for your service to our country.

Jeremy Serwer ⋅ Woodstock, CT The Serwer Company, LLC ⋅ 30 years experience

Hello Dakina,

There are some good points in the previous three posts. I'm guessing, with limited capital, you're looking to buy/fix/sell your investment quickly, vs holding and renting the property after you fix it up.

Bottom line: the property you purchase needs to have a "restored" value (post-fix up) well in excess of your purchase price plus fix-up costs -- AND, supported by comparative recent sales of like property in your market. While that's the attractiveness in "flipping" foreclosures (buying/fix-up/immediate re-sale), the numbers have to work.

Numbers components include: purchase price, closing costs, all fix-up materials, all fix-up contract labor, carrying costs (mortgage/taxes/insurance), and closing costs as a Seller. Each of these categories carries with it further detail.

While I've done this, I live in southern New England where real estate values are high, so it's not easy. My best money was made buying, renting long term, fixing up as I went, and waiting for long term appreciation. Not an easy or naturally patient thing to do.

I did recently launch an effort to purchase foreclosures in northern New England (lower price points, cheaper cost of living, though tougher economies), and we're over a year now and have not made our first purchase. That reflects how active or not the foreclosure market is (we missed a good deal of it), and how competitive it is.

Doesn't mean you shouldn't try, especially if you can provide your own labor: you.

Happy to discuss further. Please respond via this forum and I'll provide my personal contacts, if you wish.

Good luck!

Jeremy

Robert Lamaster ⋅ Olivia, MN Kyndryl ⋅ 17 years experience

The answer would also vary depending on what you expect to do with your investment property. Are you looking to buy and hold it, doing only necessary repairs, or are you looking to buy and flip? If looking to flip, you will need some serious expertise, as well as the help of professionals who can advise you of potential problems with structural issues, permit issues, electrical issues, pest issues, code violations, market research, etc. There is nothing worse than buying an investment property and discovering later that the foundation is cracked or that the plumbing or electrical systems need severe work. Well, there is one thing worse, and that is to go into debt when you purchase that property.

Before getting into investment properties, I would highly recommend that you spend some time with several people who already do this and listen to their horror stories. If you still want to go ahead, surround yourself with the best advisors you can find who've been there and understand how to avoid the pitfalls.

Byron Chen ⋅ San Diego, CA U.S. Marine Corps, Captain ⋅ 6 years served

It sounds like what you are looking to do is to use creative financing options to fund your real estate investments. Before you get to that point, however, you should consider asking yourself a few questions. What is your risk tolerance level? Are you looking to do this part time or full time? What is the exact amount you have to invest (this shouldn't be a random number you pick, but an assessment of your budget)? There are people that do exactly what you are trying to do -- check out the Bigger Pockets Forum (a real estate blog and podcast) to connect with like minded investors and ask their advice. Real estate can be a good financial vehicle for your investments, but that means being able to understand the value behind assets, rental cash flow, and the risks involved.

John Green ⋅ Cary, NC Information Technology ⋅ 40 years experience

Did you mean properties valued at three hundred thousand ? Thirty thousand won't work, unless that is your down payment ?

There is a reason why people don't pay on their mortgages, and many times its because the homes are in severe disrepair. This could be air conditioners that do not work, unresolvable chronic plumbing problems (sewage backup), etc. Not to mention the cosmetic problems with paint, drywall, etc.

Do you do handy work? Are you good putting up drywall? Can you fix a sewage backup problem? Unless you are actually the one to perform this work, I would steer clear of foreclosed properties.

If you are looking for employment, there are alot better ways to earn a living.