Foreclosure pros and cons

Purchasing a foreclosed property is risky business, and according to  professionals, people should know what they are getting into before they buy.
James Freer, a Weber State University graduate, and his wife thought getting into the real estate business would be a good way to earn some extra income.
“We looked into it and decided that buying and turning foreclosed homes would be fun,” Freer said, “but we really had no idea how hard it would really turn out to be.”
Kevin Turner, a local real estate agent, said the biggest drawback of buying a foreclosure is that you may lose money on the deal.
“Even if you buy a piece of property for a discount,” Turner said, “there is no saying that you are going to make money on the deal.”
According to Freer, he and his wife were going to purchase the foreclosed homes, put some of their own money and time into it, then hopefully turn around and sell the property for a decent profit.
“We didn’t know that these homes were in such awful condition,” Freer said. “It took so much time and effort to make the home livable that we began losing money.”
Turner also mentioned drawbacks.
“Another problem with buying a foreclosure is that these homes are generally run down,” Turner said. “When people are having a difficult time paying their mortgages on time, they usually don’t concern themselves with the upkeep of their home.”
Although Freer and his wife didn’t do very well with their first foreclosure property, they decided not to give up on the industry.
“We learned a lot with that first property,” Freer said. “Now we have bought and sold four more foreclosed properties since then and have done really well.”
Justin Wildon, a real estate investor who has been buying and selling foreclosures and other properties for years, said people thinking about turning properties for profit need to do their research.
“It doesn’t matter why you are getting into the business of buying,” Wildon said. “The more you know about the benefits, the better off you will be when buying.”
Now, Freer and his wife know beforehand what shape the property is in before they buy it.
“We decided to only buy foreclosures that are in OK shape,” Freer said. “That way we don’t have to put too much time and money into fixing it.”
According to Wildon, most people have heard of foreclosures, but are ignorant about the benefits.
“If you are looking for an additional income, and you have the resources,” Wildon said, “buying and turning foreclosed properties is a great way to supplement your income.”
Wildon also said thereare no guarantees when it comes to buying a foreclosure.
“You will have to put in plenty of time to give yourself the best chance of success,” Wildon said.
Freer and his wife have become so successful at turning these foreclosed homes that they have both recently quit their full-time jobs in order to concentrate more on their real estate.
“We sold the past two homes for enough profit that we wanted to make a career out of doing this,” Freer said. “My wife and I enjoy it, and who can say they enjoy what they do for a living?
Even though the Freers have become successful at buying and selling foreclosed properties, Wildon said that is not the case for everyone.
“I’ve known many people to get burned trying to get into this type of business,” Wildon said. “It’s up to each investor to know what the good and bad is of buying a foreclosure.”