The US housing market has been on a hot streak for the past few years. That might make you think that it’s not so easy to find and buy foreclosed homes for sale as a real estate investment. However, the market is always littered with foreclosures- you just need to know the best way to find them.
The Different Ways for How to Find Foreclosed Homes for Sale
There are actually a few ways for how to find foreclosed homes for sale:
- House Auctions/ Courthouse Step Auctions
- Real Estate Agents
- Asset Management Companies
- Government Agencies (HUD homes)
- Real Estate Websites
- Websites of Major Banks
- Real Estate Signs
Within this short list of options for where you can find foreclosed homes, there are even more options. For example, there is a wide variety of foreclosed home websites and management companies to choose from. How do you know which one is right for you? Which option do you go for as a real estate investor?
The Problem with Buying Foreclosed Homes
There are plenty of pros and cons of buying foreclosed homes. You don’t want to face more cons due to a bad start to your property search. The key here is that you are looking for foreclosed homes for sale to use as a real estate investment and make money. Whether you plan on flipping the foreclosure or using it as a rental property, you not only need to know how to find foreclosed homes for sale but how to analyze them for their potential returns. After all, even if you’re not a seasoned or full-time real estate investor, your focus still needs to be on getting a good ROI (return on investment). And your method of investment property search needs to reflect this to avoid losing money down the line.
See, with house auctions, buying from banks or the HUDhomestore, for example, you will still need to analyze the foreclosure investment property. Even a lot of real estate websites simply have listings and you’ll be left on your own to choose which foreclosed home will be a good investment property for your strategy.
So now you might think you have one option: work with a real estate agent. When investigating how to find foreclosed homes for sale to invest in and make money, keep in mind that you need a real estate investment agent rather than one who works with homebuyers.
If you do find a great real estate agent, then buying foreclosures might prove to be profitable for you. But there is another way.
The Best Way to Find Foreclosed Homes for Sale
The alternative to working with an agent is Mashvisor. In fact, you may want to use Mashvisor before contacting an agent as well. That’s because this real estate website is not your average foreclosed home website. The platform doesn’t just offer foreclosure listings. It offers a way to analyze them and determine your ROI. It’s actually one of the best websites for finding foreclosed homes.
So let me walk you through how to find foreclosed homes for sale using Mashvisor.
How to Find Foreclosed Homes for Sale with Mashvisor
Step #1: Choose a City to Invest In
Do you want to flip the foreclosure? Or rent it out for the cash flow? Do you want to have a long-term rental or own an Airbnb? Whatever your real estate investment strategy, you need to choose a housing market where the strategy is profitable. If you’re not sure what city to choose, start with these three lists:
If you want to invest in a foreclosed home for sale near you, make sure your local housing market makes sense for your strategy of choice. Don’t just invest there for convenience!
Step #2: Search for Foreclosures in That City
Now that you have settled on a city, it’s time to start your search with Mashvisor. Visit Mashvisor’s homepage and enter in the name of the city in the search bar and hit the “Start Analyzing” button.
Next, you’ll want to set the Foreclosure filter:
That way the only real estate listings you will see are the available foreclosed homes for sale in the city of your choice.
Step #3: Set More Property Filters
If you were using any other website to find a foreclosure, you’d be on your own right now, sifting through hundreds of investment properties. With Mashvisor, you have more filters that you can apply such as:
- Type of investment property financing (cash or mortgage)
- Down payment, type of loan, interest rate (if you’re using a mortgage)
- Desired cash on cash return and cap rate
- Neighborhood (with this filter, you’ll get a neighborhood analysis as well)
- Number of bedrooms and bathrooms
- Year built
- Square feet
- Desired rental income (for a long-term rental or an Airbnb rental property)
- Type of investment property (single family home, multi-family home, townhouse, condo, etc.)
This will narrow down the listings to the exact foreclosed homes you have in mind. And what you’ll notice is that a lot of the property filters focus on making money in real estate- cash on cash return, cap rate, rental income, and even your financing. So you’ll be sure to find foreclosed homes for sale that you will profit from.
Click Here to Start Your Search for a Foreclosed Home
Step #4: Choose a Foreclosed Home and Analyze It
If you plan on fixing and flipping the foreclosure, at this point, you need to move onto the home inspection. Figure out the repairs and costs as well as the after repair value. You want to analyze the foreclosure to make sure that whatever cash investment you put into it is worth the ROI upon selling.
If you’re interested in steady positive cash flow (and you should be), analyzing a foreclosure that is going to be used as a rental property requires an investment calculator. Mashvisor’s rental property calculator can perform both property analysis as well as comparative market analysis for you in a few minutes time.
Comparative Market Analysis
With a thorough CMA, you ensure that you don’t overpay for a foreclosure. After all, you’re likely going after this type of investment property as a way to land a good deal on cheap real estate.
While learning how to find real estate comps is a good step to take if you want to be a successful real estate investor, Mashvisor provides comps for any listing on the platform automatically:
That way, you can check to see if the foreclosed home is actually listed for below market value or not to make sure you get the best deal.
Investment Property Analysis
Cheap investment property for sale might be great for flipping, but rental property analysis will show if it will be great for cash flow. Mashvisor’s investment property calculator will show you the following metrics for foreclosed homes for sale on the site:
- Comparable rental income
- Monthly expenses
- Cash flow
- Cash on cash return
- Cap rate
- Occupancy rate
- One-time startup costs
- Recurring costs
- Investment payback balance
The rental property calculator will also show you each metric for the two different rental strategies- short-term Airbnb or long term. That way, you can decide which the optimal one for this particular foreclosed home is. You will also be able to adjust your financing method so it is taken into account in the cash flow and any ROI metrics.
After you make any adjustments you need to the financing values or the expenses, you will be able to see the rental property ROI for this foreclosure! With this method of how to find foreclosed homes for sale, you would have just found the best property you could ask for.
Sign up for a 14-day free trial with Mashvisor and find the best foreclosed homes for sale today.