San Diego is a great place for investors who are looking to buy real estate. The most common types of properties these investors are looking for are REO, Trustee Sales, and Short Sales. There are still various opportunities for San Diego real estate investors to make a lot of money in real estate. Banks are still taking properties back daily when the home owner defaults on their mortgage.
There are 3 locations that investors can go to in order to purchase properties at the auction. The first location is at downtown San Diego court house. The second location is at the El Cajon court house. The third location is at the Oceanside court house. Every morning starting at 10am, all three locations have trustee sales auctions where most of the real estate investors can bid on these properties. On average there are about 300 properties that go to sale. Properties can either be postponed, cancelled, sold to 3rd party, or become an REO. Properties that are sold to 3rd party basically means that an investor has purchased it and will most likely rehab the property for sale.
Recently at a bank REO convention meeting representatives from Wells Fargo and Chase bank have admitted many of the lenders are still holding onto a lot of distressed properties. Some estimate for the number of distressed homeowners nationwide is around 8 million. With over 8 million properties still about to go into foreclosure, investors are looking to get into the housing market.
Before any investors jump into buying properties at the trustee sale. It is important to get a few basic things in order. The first is to have a means of identifying which properties will go to sale. Most investors use ForeclosureRadar. This is a subscription based tools where investors can get daily updates on any properties going into default. The second thing is to make sure the property has a clean title. Some investors who are new have purchased properties that are in 2nd position only to find out they still owe a lot of money to the first lender. This is a really big mistake. It is important to also check for any judgments, federal tax liens, etc. Because this will also affect the investors ability to re-sell the property. The third thing to remember is making sure the occupant or home owner is willing to move out or at least consider cash for keys. A cash for keys is an expression that means the home owner will cooperate and move out at a specific time if they are given a certain amount of money. The last thing to keep in mind when buying a property at the trustee sales is the rehab cost. It is very important to have an accurate estimate of what the rehab of the property will cost.
Many new San Diego real estate investors underestimate their rehab cost and as a result end up losing money in the course of flipping a property. If you have any questions about being a San Diego real estate investor, please feel free to contact Scott Cheng, by phone at 619-846-5843, or by email by clicking here.