Know Your Market When Investing in Bankruptcies

The first thing you must do as an investor who is investing in bankruptcies is to know your market.  You must be able to recognize what is a good investment and what is a bad one.  You must know what areas are on the rise and which ones are declining.  You have to know what is in demand. You do not want to put money somewhere it will just vanish.

As a real estate investor you must determine what kind of marketing niche you are going to be a part of.  Investing in bankruptcies is easy for anyone to do. The hard part is making money.  This can only be done with a good marketing plan.  Every business has one and your business is investing in bankruptcies so you must create a good marketing plan.

You must understand your market when investing in bankruptcies.  You first will want to decide whether to become a landlord or just flip the properties you buy.  There is a big difference as to what a good investment is between these two strategies.  Some properties which might be great for one could spell disaster for the other one.

 The landlord can look at just about any property on the market.  The key to becoming successful as a landlord when investing in bankruptcies is making sure you do not buy more than you can afford.  If you must take out a mortgage on the property you take the risk of the property being vacant and you having to come up with the payment out of your own pocket.  You also assume the risk of the tenants not paying, or worse yet, damaging the property.  Repairs can become costly when dealing with a rental property.  Proper screening of your tenants can prevent most of the risks.  You still need to make sure you are buying at below market value when you do buy a rental property.  Investing in bankruptcies can almost certainly guarantee this happening.

You may be the type of person who just wants to buy the properties, fix them up, and sell them.  You will need to know what is in demand.  You do not want to buy a large family style home in a senior citizens retirement district.  You would never be able to sell it for what it is worth because the people who want to live there do not want large homes.  Likewise you can not afford the mistake of buying a two bedroom bungalow surrounded by spacious three and four bedroom homes.  You must zero in on what the market is asking for.  When you determine this then you are on your way to knowing what to look for when investing in bankruptcies.

Pricing is another issue.  If you are investing in bankruptcies, the lower the price is usually better.  However you must also take into consideration what the market is averaging.  You might be able to find a great deal on a beautiful home for 60% less than the average selling price of comparable homes in the area.  Before jumping into the deal, determine how many days each of the homes which sold was on the market.  If it was more than 120 days then you may be stuck making payments you do not want to be liable for.  Just because the house sold for such and such a price does not mean the property was in great demand.  The law of supply and demand plays an important role when investing in bankruptcies. 

When you realize how the market is growing or depreciating then you can better understand how to invest.  Certain areas are constantly growing because of the job market.  A good, solid job market always generates better real estate opportunities.  You just have to know your market when investing in bankruptcies.

 

 

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