To keep investors and future homeowners up-to-date on the latest real estate news, Foreclosure.com features an Article Center that we update each day. These articles are also archived in the left sidebar for your convenience.

Bob Bruss — who is widely known as the “Dear Abby” of real estate — is often featured in this section. He leverages more than 23 years of experience in the industry to provide readers with usable information.

And a recent article on “10 things investors should look for in fixer-uppers” is certainly no exception. It’s a simple approach on how to profit in today’s real estate market with homes that need a little “TLC.”

Whether you call them “fixer uppers” or “handyman specials,” there are not too many other businesses other than flipping real estate that can generate a similar return on investment in such a short timeframe.

Consider the following:

1. Basically sound condition without major structural defects
2. Good location with a low crime rate
3. Good-quality school district
4. Need for profitable cosmetic fix-up work, but not major unprofitable repairs
5. Purchase price at least 30 percent below the market value of nearby comparable homes in good condition
6. Purchase from a motivated seller who is anxious to sell
7. Affordable low-down-payment financing
8. Seller or tenant will vacate immediately upon transfer of title
9. Within a 60-minute drive from your current residence
10. Good demand from renters and/or buyers

To read the entire article check out InmanNews.com (subscription required).

Now, the quick steps mentioned above are not going to turn you into a pro overnight. But, use them as a guide as you research potential investment properties on Foreclosure.com.

The best general advice we can offer on this topic is to go after houses that are located in nice neighborhoods and only need minimal amounts of work.

That’s because just some minor touch-ups and cosmetic work such as painting and new carpets can go a long way when it comes to turning a nice profit on a home.

In short, look to purchase the ugliest house on the prettiest block. Don’t be scared off by houses that look and smell terrible. These are often easy — and cheap — fixes.

Happy house hunting!

The preforeclosure stage is a time when a homeowner is behind on his or her mortgage and the lender has filed an official Notice of Default (NOD) or Lis Pendens (LIS) to recoup the payments.

This will often lead to foreclosure if the homeowner cannot come up with the cash or negotiate a deal with the lender to remain in the home.

Rather than face eviction and endure personal credit turmoil, a distressed homeowner in preforeclosure will often look to sell the property as soon as possible and use the proceeds to pay off outstanding debts with the lender and relocate.

It’s an unfortunate situation — one that is outside the control of anyone but the homeowner and lender. However, working with a homeowner to resolve the matter before foreclosure is one way to help and provide him or her with much-needed relief.

It can also translate into huge savings because preforeclosure investing gives you the most options and highest percentage of profit.

Here’s a tip to get you started:

When working preforeclosures, the earlier you make contact with the homeowners, the more options you have to capitalize on great deals.

How do you do that?

First, you need to identify homeowners in your area who are in preforeclosure. This can be accomplished at no cost or obligation using our FREE 7-Day Trial.

With a solid set of leads it is then smart to drive into the neighborhoods and canvas the homes from the curb to determine which are the most desirable.

The next step is to communicate with the homeowner. This can be done in a few different ways, and we recommend that you try multiple approaches to ensure that you get noticed by the homeowner.

Here are a few quick methods to contact a homeowner in preforeclosure:

• Letters
• Post cards
• Contact the homeowner’s attorney
• Direct purchase
• Short sale
• Mortgage purchase

We expand on each of these strategies in our e-Book entitled “Cash-in on the Foreclosure Process: How to buy a Foreclosure.”

This educational resource is packed with tips and advice that is required reading if you plan to get started investing in distressed real estate.

Best of all, we’ll email it to you at no cost with our FREE 7-Day Trial.

In our last post, we introduced the Foreclosure.com Flip Formula for Success.

Today, we’re going to break down all the factors that go into making it a helpful tool that can successfully guide you through the real estate investment process.

Let’s get started.

First, it’s important to establish a realistic re-sale value (RRSV) so that you will avoid having to market a property that is overpriced and takes too long to sell. It is a smart idea to price your flip 2-3 percent less than the competition. The attractive price along with the like-new appearance of your property should make for a desirable new home.

Next, determine the seller closing costs (SCC). Items like a brokerage commission (if you require the services of a real estate company), state stamps on the deed, possible buyer closing credit, prorated taxes, title search fees and any attorney fees are all possible expenses for which you need to account.

Read the rest of this entry »

To properly analyze the value of a potential flip it is a good idea to have a time-proven formula with which to work.

Adopting a successful formula and following it can help minimize the chances of being surprised by unexpected costs that eat into your net profit and turn a great deal into a money pit.

Far too often, an inexperienced investor will try to analyze a flip by taking the cost of the property he or she has purchased and adding the repairs and carrying costs to arrive at a projected re-sale value.

However, the re-sale price is not arbitrarily based on the amount of money that is invested in the property plus a sizeable profit. On the contrary, the re-sale price is based on comparable sales in the neighborhood that take into account the size of the property, its condition and amenities.

Here is an easy-to-understand formula that works for us:

Realistic Re-sale Value (RRSV)

minus Seller Closing Costs (SCC)
minus Debt Service (DS)
minus Repair Costs (RC)
minus Minimum Acceptable Profit (MAP)
minus Buyer Closing Costs (BCC)

= The X-factor: Maximum Property Purchase Price (MPPP)

We call this the Foreclosure.com Flip Formula for Success. Write it down and keep it in a safe spot, because you will need it one day soon.

In our next post, we will explain this formula in more detail and also tell you how it can keep you on track and under budget.

In our last post, we briefly discussed the various home improvement programs on television that are creating a few misconceptions. Primarily, that it is easy to flip a home. That all depends, of course, on your level of experience.

If you are new to foreclosures, then we want to point out a few more things.

First, renovation expenses almost always run over budget. And that means in the real world investors sometimes run out of money to cover additional repair expenses and a couple extra mortgage payments.

To avoid this situation, build in a little extra cash in your budget just in case issues emerge midway through a renovation project. This way, if problems arise, you’ll be ready. And if they don’t, you’ll come in under budget.

Second, purchasing, rehabbing, marketing and selling a property in 30 days is almost impossible — even if you have years of experience under your belt. Whether the kitchen cabinets you want to install are on back order or the repair crew you hire gets stuck on another job, something unexpected will usually pop up.

So, set a reasonable project schedule and always be prepared to expect the unexpected.

Third, don’t expect to receive positive responses from all of the potential buyers who visit the completed project. Expect to hear comments like “It’s a little pricey for the neighborhood