Investing in property can mean spending huge amounts of money, with homes in King County often hitting the $300,000 to $450,000 mark with the median being the latter rather than the former. Unfortunately, it can be hard to turn a profit on these higher priced houses and units, meaning that the real estate investor must instead look elsewhere for a savvy purchase. Foreclosures are often a much more affordable purchase, but they do require care in investment. Washington state is number 14 on the list of states with the highest foreclosure rates and King County has one of the highest foreclosure rates in the state, making pickings in Seattle, Sammamish, Redmond, and surrounding areas significantly better than surrounding areas. In April of 2013 there were some 736 homes with a Notice of Trustee Sale, while in May that number had dropped to a still respectable 669. That leaves plenty of homes for prospective property investors to look into during the month of June.
Pre-Foreclosure
It is sometimes possible to purchase a pre-foreclosure home before it goes up for auction. This is advantageous because it means that rather than competing as the highest bidder, you can simply make an offer, or pay out the mortgage in order to gain the property. The down side of this is that it can take a large chunk of money all at once in order to purchase a home pre-foreclosure. Websites like Zillow can help you to find pre-foreclosure homes in the area but from there it is up to you to figure out if the home is worth the money, to research to check any hidden loans or liens on the property, and to make a bargain with the homeowner to buy out their mortgage. Many won’t be willing to do this unless they realize that they have no way out without losing the home.
Foreclosure
Foreclosure properties are those that have already been repossessed by the bank. These properties typically go up at public auction. While it is possible to check to see which properties have been given a Notice of Trustee Sale via the city’s public records, not all of these homes go up for sale. The best bet is to check with the local courthouse to see when properties go up for sale. Foreclosure auctions are traditionally held on the courthouse steps, sometimes from the county seat, and sometimes from the city that the auction is being held in. Some may also be held at various locations dependent upon the bank holding the auction. King County typically publishes all foreclosed homes going up for auction in the Seattle Times (Classified/Legal) so that is the easiest place to check, but it is also possible to pick up a copy for $5 in office. After finding out which homes are being foreclosed, it is important to evaluate the property as much as possible, decide on a maximum budget, and then not exceed that budget while bidding.
Purchasing a foreclosed property can be a great way for property managers to get anything from a multi-family home to commercial property, but in either case, it requires care and research. Foreclosed homes might have issues, require repairs, or be in pristine condition so it is sometimes a gamble to make the purchase. Remember to set a budget, decide how much you can risk, and how much you can rent the property out for afterwards before making any purchases.