Austin Real Estate Foreclosure Article

Investing in Foreclosures in Austin

While the individual or family that loses a home through foreclosure is obviously going through a rough time, and we certainly don’t want to celebrate such a loss, finding a home that has been foreclosed on in which to invest can be a great way to build equity and make money for your future. In Austin, with the recent telecom and dot-com crashes, there is an abundance of Austin foreclosure listings through which you can search for the real gems. How do you determine whether you are getting a sound deal that will actually allow you to profit in a foreclosure purchase?

When searching for properties for sale, pay special attention to Austin foreclosure listings. Take an inventory of the statistics on everything you find, not just the ones in which you are interested. After all, any of these properties could be potential Austin foreclosure investment properties, regardless of whether or not you would choose to live there. Once you have recorded the general information, including price, square footage, year built, address, and location, you will complete the second half of the task.

The county appraisal districts in Texas and across the country keep track of the appraised property value of all homes in the county for purposes of taxation (not something we look forward to, but at least it collects the information you’ll need here). If you look up the website for the county appraisal district, you’ll find that you can perform a search of any address within the county, including any Austin, Texas foreclosure listing you’ve just written down, and determined what the appraised value is.

Here’s the most important part: if the value of the home does NOT exceed the asking price, do not invest. Austin foreclosure investment properties are supposed to be sold by the bank for only what is left of the mortgage after the previous owner defaulted. Therefore, you should usually expect the previous owner to have built some equity into the home with his or her payment plan. If this is not the case, turn away. Negative equity never makes for a good investment.

If you are satisfied with the amount of equity built into the investment, determine one more thing prior to signing on the dotted line. You should look at the house in person, perhaps hiring an appraiser to help you out so that, should you have to make extensive repairs, you can add this into the cost of the Austin foreclosure investment property. Should that added in expense still cause you to go above the value of the home, let it go; a better deal will always come along.