Not too many years ago I began investing in real estate to help provide for my retirement.  Then one day without too much warning I had to make a decision, do I make real estate my fulltime business or try and re-establish my current business at a new location.

You see I had a job, even though I thought I owned my own business in the golf industry, I owned a very busy and very profitable teaching business. But with management changes I quickly found out that I too was an employee.  I found that the hard work and expenses of opening my own business, even though it was successful was now gone. 

I jumped into real estate full time.  Foreclosures were appealing to me because I liked making money when I buy, not when I sell.  My process was quite simply and anyone can repeat the process.  I found a way to locate properties that I could buy for 30 to 50 cents on the dollar.  I did not want to deal with people that were going through the emotional turmoil of losing their homes. This was just too tough for me emotionally

Foreclosures can be homes with very little work needed and tremendous upside equity. Usually a home like this one will have 30-40% equity after all repairs!

They’re 3 times to buy foreclosures, pre-foreclosure (personal) ,auction (possible shark tank) and post (it’s business). I focus on the post foreclosures. This is when the banks own something they do not want and must get rid of it as soon as possible. You see they can only have a certain percentage of their entire portfolio in real estate held. So when a bank has too many foreclosures their motivation levels go way up and the prices go down!

The key is to locate markets that have a high foreclosure rate, and still have a market with a good demand for rental properties.  In the US right now I would say we have at least 5 very good markets like this.   One that few people realize is Detroit Michigan.  This is a city that has approximately 46,000 foreclosures, but at the same time is going through and incredible revitalization process.  Remember the Super-Bowl, how about the Ryder-Cup, and future NCAA Finals in Basketball, the NBA All-Stars.  In other words these are signs of a city coming back, big time!

It is important to realize on thing, before you decide not to invest out of state.  When you go to your mailbox and get your rent checks, do you care where they come from?  This was my turning point. Because one day my immediate market changed so fast I could not invest using my buy and hold mentality. So I realized I could invest in any city, anywhere in the US. You must make sure to develop a team of experts in that market. Which sounds difficult, but it is not. Your power team made up of a realtor, appraiser, rehabbers, property management and inspectors is critical.