All too often, I meet people who are trying to make it rich in the foreclosure market. They think they can just find a foreclosure, buy it for half price and then sell it for 10% above market after vacuuming and adding a fresh coat of paint. There are so many things wrong with this plan that I don’t even know where to begin. If it were actually that easy, everybody would be doing it.
The first thing that you need to do in order to make money from foreclosures is know what you are doing. Most people think the fist step is to find and buy the foreclosure, so they go and figure out the best way to find foreclosures. The do a quick search online and see that there are a ton of foreclosure listing services that claim to have access to thousands of foreclosures which you could make millions from!
The unsuspecting victim thinks that this is a great find. They think that they just hit a goldmine! The only thing that could possibly sweeten the deal is if the service was offered for free. Well the next closest thing is some sort of trial offer. The victim thinks that this will be all the time they need to find a few foreclosures, so they go ahead and fork out the couple bucks for the ten day or week long trial offer.
They excitedly start searching the database, slowly losing hope as they see the foreclosures aren’t as cheap as they thought they would be. Most are priced at market price or just slightly below. They find a few that are priced in their range, and try contacting the owner or real estate agent. Unfortunately, these properties were sold months ago and received multiple offers above the asking price.
Slightly disappointed, the victim decides that foreclosure investing is not for them. It is a lot more work and risk than they thought for a lot less of a reward. They justify the few dollars they spent on the trial offer by telling themselves that they at least gave it a shot. They put the whole experience behind them and go back to their normal life.
A few months later, they are looking at their credit card bill, only to find a few mysterious charges. Each month for the past several months, they have been charged $49.90 by some strange internet company. Furious, they call the number and find out it was for the foreclosure listing service that they had signed up for several months ago. The customer service rep tells them that they should have read the fine print and they can cancel the service now if they want.
In the end, the victim thought they would be making thousands overnight from a few dollar investment in a trial offer, when it ended up costing them a few hundred with no glimpse of any return.