Q&A: Investing in foreclosed properties

Q: I live in an area with a lot of foreclosed homes. It seems like a good investment to buy some of these properties and turn them around for profit once the housing market takes off again. How do I get started?

A: Foreclosed homes can be a bargain, and even more so if you're able to repair the homes yourself, rather than paying someone to fix plumbing, lay down new carpet, and the like. Of course, investing in foreclosed homes brings along plenty of risk because no one knows when housing prices will stabilize. Additionally, sellers of foreclosed homes aren't required to provide the same disclosures as traditional sellers, so you'll know much less about the house you're buying. If you think it's worth the risk, though, a good place to start is foreclosure property listings. These listings are public record and can be found in real estate magazines, newspapers, and online at sites such as http://www.foreclosurelistings.com and http://www.realtytrac.com. Also, check with lenders' REO (real-estate owned) officers, who are in charge of the company's foreclosed properties. In general, when you're interested in foreclosed properties, banks and lenders are your safest bet.