Foreclosures in San DiegoForeclosures present a tantalizing option for real estate investors. The prospect of finding a pristine property competitively priced because of a down market makes many speculators salivate. The unfortunate reality is that many foreclosures are not fit for purchase, let alone investment or resale. The down market provides some opportunities for people looking to buy a first home, but unless you intend to reside in your purchase for five or more years foreclosures are risky investments. With that in mind, high risk can also mean high reward. If you are dead set on purchasing a distressed home in this real estate market, consider these three things:

Location, Location, Location

How did the market look in your foreclosure’s area before the crash? Markets that were once competitive are more likely to rebound and become competitive again. Avoid getting burned on a home purchase by buying foreclosures in middle-class neighborhoods with a history of market gains.

Sound Structure

Beware of damaged real estate. Foreclosed properties more often than not have one ore more serious flaws with the structure of the house. If you rush into a real estate deal without doing your homework, you may find yourself spending more on rehab than you did on the initial purchase. Have an experienced contractor or appraiser investigate any foreclosed property before you sink your nest egg in a dangerous investment.

Legal History

Are there any open contracts, liens or claims against he foreclosure that you are looking to purchase. People who get foreclosed on often have a few other legal problems along with their financial ones. When you buy a property, sometimes that legal baggage comes along with it. Make sure you do your research and check the litigation history on the address. Never buy a house in contractual dispute.

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