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Jun

Getting a Great Deal on an Arizona Foreclosure

There is a new feeding frenzy developing in the Arizona housing market. The buzz words are auction, foreclosure, short sale, REO, etc., but the common theme is “deal”.

During the run up of 2004-2006, people were pretty much buying anything with a “for sale” sign and we all know how that story ended. Today I am seeing a similar lack of judgment with people rushing to buy any property that looks cheap.

I was on a great dive trip over Memorial Day weekend. Part of a dive trip is being on a small boat with a group of total strangers. Without fail, somebody on the boat reminds me that while anybody CAN wear a tiny string bikini or a Speedo, most people shouldn’t. Even if they found a store that was handing them out for free.

Don’t get me wrong… I love a deal as much as the next guy, as long as it is a deal on the right property. The wrong rental property, even at an amazing price, will never deliver an incredible result in terms of revenue. Just like that free Speedo, it may not be the best fit.

Even the cheapest foreclosure bargain can be an expensive investment mistake.

Before you run out shopping, do your homework (see a related article on “Choosing the Right Property”). Get clear about the long-term plan for your investments. Know what you expect the investment to do for you over time. Decide what type of tenants you want to attract. Then, make sure you understand what type of property will meet all those requirements.

If you don’t do your homework on the front end, your chances of ending up with the perfect property are remote.

We get calls from hundreds of investors looking for property management every month. The worse a property is, the more difficult it is to manage, so many of the people who call are tired of the hassle and regretting the purchase. Over 80% of the homes people bring to us are homes we would have never purchased or sold as an investment.

Having said that, there are incredible deals in every price range, so there is no reason to settle for the wrong home.

With the right tools, it is easy to crunch the inventory of available properties down to a short list of homes that will make a truly great investment. Once your list of potential purchases is limited to the great investments, you can shop for the best deal without compromising long term ROI. If you know how the planning, building, and managing phases of your investment impact each other and take action accordingly, you will be way ahead of the masses that are getting a great “deal” on bad investments.

You will also avoid being the investor equivalent of the big guy on the boat who really thinks his bright yellow Speedo makes him a sexy supermodel.

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