First time investing in Bank foreclosures; tips and tricks for free.

Okay, so you have swapped trying to see how much equity you can buy for trusting your own judgement to determine the repair cost of a one of those bank foreclosures deals going in the neighborhood. Let’s test your strategy.

You have setup a subscription to a listings service you like the look of and you are keen to get on with selecting a small number of recently repossessed properties. You are sharpening up your negotiation skills ready to hit the bank with your offer. You have already checked out access to a great site that will give you comparable sales values. Now to determine your formula to set an offer price. Wait a minute, what about minimising the risk of blowing your budget with repair costs.

Here’s the first tip (actually it’s a number of tips but never mind); set up a simple spreadsheet template that you can use for every property in your final selection. Separate out your cost estimates into two buckets, essential and appeal enhancing. You need a column for estimated cost and another for the expected benefit to your resale price for each repair. Then you can rank each repair in order of best benefit, and always have a way of controlling the less essential costs. Make sure you know all the great sites for estimating repairs, and get an average estimated cost rather than just one from your favorite supplier.

An unanticipated blow-out in your hold time can cost you heaps. The experienced and large company rehabbers plan to flick on in 6 weeks or less, and they have worker crews on stand by. Have your resources ready by coordinating timing with your bid process. If this is difficult to manage, be realistic in costing your likely hold time into your budget. Don’t overlook the true cost of your time, if you are not free to devote yourself to the project when required.

You have a pre determined profit percentage. That’s not a question. Don’t be tempted to skimp on this part of your budget when things go wrong, that’s your cushion and compensation for risk. Whatever happens try to lower your less essential expenditure and reduce your hold time even if it means lowering your price a little. And good luck!

Philip Smith is the writer of http://www.foreclosuredatabank.com. Your Source of Bank foreclosures online.