INVESTING IN FORECLOSED PROPERTIES
You must know your strategy going in before you take the first step toward finding and buying a property. Tactics that are appropriate for one strategy may be a mistake for another strategy. The less defined your end goal, the more likely you are to make costly mistakes along the way.
|Goal||Strategy||Timeframe||How it works|
|Generate long-term cash flow and build net worth||Buy and hold||Years||Cash from rental while increasing net worth through appreciation. Long-term investment of capital.|
|Generate near-term income||Fix and flip||Months||Add value through renovation and by fixing title, occupancy or financing issues. Short-term investment of capital.|
|Make a quick buck||Wholesale flip||Days or weeks||Realize instant revenue by selling as-is. Very short-term investment of capital, 1-4 weeks.|
Each has its advantages, cash requirements, risk level and required skill set. For example, if you follow a flipping strategy, you need to know how to sell. If you follow a holding strategy, you need to know how to rent and manage property. This is why Children’s H.E.L.P. recruited experts licensed and experienced in real estate transactions and finance.