Investors interested in taking advantage of the hundreds of foreclosures on the market often don’t realize the intensity of the competition for these properties. Novice investors and first-time homebuyers often walk away from their first foray into the foreclosure market stunned. Some never go back. But with the right team on your side, you too can become a savvy investor.

 One of the more popular ways to purchase a foreclosure is at an auction, so before you even consider competing with other auction buyers, make sure you understand the process and are working with someone who can prevent you from making a rookie mistake.

Plenty of valuable properties are available at auctions for buyers who know their local market well and can immediately identify homes with potential and homes which are best avoided at all costs. Here at Team Investments, our group of experts has developed an auction action plan which can result in profitable investments.

·      The night before an auction, we obtain the list of properties available and work from 6:00 p.m. to 6:00 a.m. to review them. Often, that list has more than 700 homes to evaluate.

·      We find every piece of information we can on each property, looking at the year it was built, the minimum bid (if any) and check the property against comparable local homes.

·      In every case, we develop an estimate of the sales price versus the value of the property. The key to making a great investment rather than just a good investment is to never buy a property at above 60 cents on the dollar.

·      After we cull the list, narrowing it down to perhaps 60 or so that we deem worthy of investigating further, we send a trusted contractor to visit each of our potential buys.

·      The contractor checks first to see if the home is vacant or occupied by a tenant or occupied by an owner. If the owner currently occupies the home and would like to stay, we can sometimes negotiate an investment deal so that owners can stay and eventually buy the property back.

·      Next, the contractor checks on the condition of the home, looking at the state of the swimming pool, kitchen appliances, whether the plumbing and electricity are working and coming up with an estimate of required remodeling dollars which we can then factor into our bid.

·      By 8:30 a.m. we can put together all the gathered data into a spreadsheet for each home and then work with our on-site auction bidder to negotiate a winning deal.

While 2010 may be the year to add investment properties to your financial portfolio, it may pay to get some expert advice before jumping into the auction ring.