Monday, April 17, 2006

My First Experience With Foreclosures

Buying my first foreclosure in 1994 was both scary and exciting, I had never owned a house, the realtor assured me that I was buying a house that would make me lots of money. Having no idea how to "run the numbers" I had to take his word for it. My credit was bad and I had no cash. I even pawned my watch to get the down payment.

The house was a HUD house and I had thirty days to come up with the $17,000 thousand dollars. I had no idea how or who I would get the money from. I asked the realtor what I should do. He told me to call my relatives. I called my Grandpa and he said "I am not buying a house in the inner city." I called my Dad who said, "not in that neighborhood." Luckily, the realtor had a back up buyer. I was able to get my five hundred dollar deposit back and get my watch out of pawn. Although I didn't get any profit from the transaction I realized how little I knew about buying and selling foreclosures.

Before I bought my first house, I had attended two foreclosure seminars and bought hundreds of dollars worth of tapes, The tapes and seminars hardly prepared for the reality of foreclosure real estate investing. Now that I am experienced I realize that the tapes and seminars I had listened to where just stories that didn't teach you the fundamentals of foreclosure investing.

It took me two years of apprenticeship, under experienced real estate investors, to learn the fundamentals of foreclosure investing.

Since 1996 I have been actively involved in successful foreclosure investing. I am proud to say I have not lost money on any homes. A couple of homes came out with some slim profits but only if I violated the rules of foreclosure real estate investing. Just like any game you play, you should know and follow the rules.


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