1. Pick a property that is well within your means.
Don't allow yourself to get too overextended on the property. Way too often, we have seen people show up at a foreclosure auction and then after one bad deal, their own house is in foreclosure. Everything will take more time and money then you anticipate, so don't bite off more then you can chew.
2. Prepare to break in.
Foreclosed homes don't come with keys or contracts. It is up to you to find a way in. Our favorite methods are: Slip the lock with a credit card, lift a window, lift the garage, put your hand through a doggy door and unlock the door from within, climb on the roof and look for an open window.
Get creative and have fun with this step! If you want a set of keys to your new property you need to make your own or call a locksmith and pay $150 to get the job done. Make sure you research the local laws regarding abandoned property. You may have to store any items you find in the house for a period of time before they are yours. Former owners almost never come back for their items, so it's not out of the question to find cash, furniture, collectibles, firearms and even vehicles.
3. Check everything.
Most foreclosures were abandoned. These homes have many issues, so check all the systems thoroughly. The last thing you want is to find out that the roof is bad or the furnace needs to be replaced the day before closing.
A great tip: Speak to the neighbors. You would not believe how much they know about the houses around them. Don't avoid disclosing bad news with the house, because the people you sell to will notice everything. Budget for contingency items because they are always there, especially in foreclosures.
4. Tour other houses for sale.
Take an afternoon and tour two or three homes similar to the one you hope to flip. This is your direct competition, so view it that way. How is the curb appeal, paint colors, smell, clutter, layout, backyard, etc. This is especially important if you are new to the business and don't have the same reference points that a professional flipper does.
5. Price aggressively.
It's easy to overprice a listing, it's difficult to under-price one. If you under-price the property, you will get a lot of attention and showings fast, and people will compete for the house. Set the price to move. If you are not getting showings and no one is calling to see the house, then it is priced too high. If you are getting a lot of attention and people are walking through but no offers are being made, then the price is right, but there is something wrong with the house. Call the agent for details and don't be afraid to ask why the buyers are passing on your house.
|Sneak Peek - Meth House|
Mansion or Meth House? Flip Men Want to Know
Viewpoint: Feeling Guilty About Buying a Foreclosure?
'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose
Tempted to Invest in Real Estate? Read This First
More on AOL :
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.