Top 3 Problems Kalamazoo Michigan Beginner Investors Make when buying Foreclosures in Kalamazoo Michigan, as Discussed by Joel Nelson

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September 25, 2009, by Joel Nelson in Real Estate Investing

Here is a list of the Top 3 Common Mistakes Investors Make when Buying Kalamazoo Foreclosures,

by Kalamazoo Real Estate Investing Expert, Joel Nelson of Keller Williams Realty

Many people think that Kalamazoo foreclosures make great investments for investors in Kalamazoo real estate. Though often true, they can be dangerous investments where you might lose large sums of money. This article explains the three most common pitfalls. When investing in Kalamazoo foreclosed homes you can keep from making these mistakes.

Pitfall #1 - "All Kalamazoo Foreclosures are Good Deals"

This simply isn't true. Some corporate owner/sellers overprice their Kalamazoo foreclosed homes. Some are in absolutely terrible condition AND they're overpriced. Sometimes the corporate owners/sellers have so many Kalamazoo foreclosed homes on their books they don't really know how bad the property is. It may be the biggest investment you've ever made, but to them it's just another piece of inventory on their books. On the other hand, some corporate/owner sellers are very much aware of the condition of their Kalamazoo foreclosures. So it just depends on the property.

Some less experienced investors believe that all Kalamazoo MI foreclosures are good deals. With experience you learn than locating excellent Kalamazoo foreclosed homes requires some effort and patience.

Pitfall #2 - Jumping into Fixer Uppers

We've all heard of people who've made big money buying houses that were falling apart, fixing them and then "flipping" them. While this can be a very profitable model, it also has its pitfalls.

The biggest mistake novice investors make is buying a fixer-upper without having the skills or experience to complete the project. Unless you can predict how much your repairs will cost on Kalamazoo foreclosures, how much you can sell the property for, and then work your way backwards to what the selling price must be in order to be profitable, then you're not ready for Kalamazoo foreclosed houses that are fixer uppers.

While fixer-uppers are viable solutions for making profitable deals, several other equally profitable ideas exist that don't require the level of expertise involved with a fixer deal. Investors who are just starting out should stick to these kinds of deals. Keep it simple. Buy something that doesn't need too much work. Settle for less profit while you learn how it all works. You should treat investing in Kalamazoo foreclosures as a business.

Good research is a key component to being profitable in the Kalamazoo foreclosures market.

Pitfall #3 - Not Performing Good Research It's important to know what the fair market value of the property you own. Do your research regarding construction going on in the vicinity as well as the crime rate.

Also, don't forget to have your home inspected. If you're bidding on multiple properties at an auction, it's important that you actually step foot in all the properties you plan on bidding on before you bid on them.

These are 3 of the more common pitfalls that Kalamazoo Michigan investors tend to fall into. If you want to be one step ahead of beginners, make sure to avoid these problems. Kalamazoo Michigan

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