Join a Real Estate Investment Club

Nearly every community offers beginning investors the opportunity to join a locally operated apartment owners' association or real estate investment club. In addition, in most midsized and large cities, real estate and lending pros often offer free (or low-cost) seminars on investing and financing. Attend these investment group meetings. Talk with others who have learned the secrets of investing from years of experience. Review and ponder the lessons they've learned and the trends they're...

Buy from Foreclosure Speculators

Another way to profit from foreclosure and forced sale auctions without actually bidding is to buy from a winning bidder shortly after the foreclosure sale. Say a foreclosure speculator puts in a winning bid of 145,000 on a property that seems to have a market value of 195,000 if it were fixed up and marketed effectively. After the auction, you offer the speculator 170,000 (or whatever). To minimize risk, you attach several contingencies to your offer that permit you to get the property...

The Foreclosure Sale the Second Stage

Eventually, when the defaulting borrowers run out of time, legal defenses, or delaying maneuvers, the foreclosure sale date arrives. At this point, the court trustee auctions the property to the highest cash bidder. On occasion, a real estate investor (a foreclosure speculator) submits the winning bid. More likely, though, the lender who has forced the foreclosure sale bids, say, one dollar more than the amount of its unpaid claims (mortgage balance, late fees, accrued interest, attorney fees,...