You know that it can be cone because
= you've heard gurus and various real estate investors who sell information and seminars that tell you nothing
= you want that information for free
I think the real answer is that the seminars tell you everything there is to know about buying homes "for pennies on the dollar." Especially if you are in a bad financial situation.
Jo Anne, I hate to burst your bubble, but the really great buys that are out there require a great deal of risk - risk that's easier to take when you have a few hundred thousand to throw around on a bunch of deals hoping for some winners.
But for you to think that you'll be the lucky one . . . I just can't encourage you to go down that path.
Sure, you can go to the courthouse steps and buy a foreclosure for cheap. By the time you get possession of it, though, it might be worth pennies for each dollar you paid for it. Or it could have other title issues.
And, of course, you can always knock on doors and try to con innocent people out of their equity.
But as a practical matter, Jo Anne, I think that you need to be patient, rebuild your credit the way you'd rehab after knee surgery, and if you really want to learn about real estate investing, go to the library.
All the best,
But first my flip answer: Sure you can buy houses for pennies on the dollar. 100 cents on the dollar. Bada-bing!
Seriously, though. Most of those things you hear on the infomercials are fake. The techniques can work in some, usually very limited, cases . . . if you know exactly what you're doing.
Most of the "pennies on the dollar" infomercials relate to buying properties at tax sales. And once in a while you can come across real bargains. But there are other investors who are also following the tax sales, too. True story: I actually lost a property at a tax sale to someone who bought it for "pennies on the dollar." Long story, but it was a new condo development with the garage spaces listed as separate pieces of property. However, when a person (me, and about 20 others) bought a condo and a parking space, the condo was transferred into my name but the D.C. Government messed up and didn't properly transfer the parking space. So the tax bill for the parking space kept getting sent to the developer. He didn't pay because he'd sold the spaces. Each parking space cost $6,000. Three year's worth of taxes was probably about $200. An investor bought these $6,000 spaces for $200 each. Then he "generously" sold them back to the original owners for $2,000 each.
But most tax sale properties are abandoned properties. Or else they're unusable slivers of land.
So that's "pennies on the dollar."
Now, there are folks who are willing to sell properties for less than they'd be worth if they were put on the market with a Realtor. There are lots of different motivations for that. Sometimes the person just wants to sell quickly. And without hassle. And without a "retail" buyer complaining about needed repairs. And without lots of people tromping through the home. Sometimes it's a property that hasn't been upgraded since the 1970s. Sometimes it's a rental property with a lot of wear-and-tear, and the owner doesn't want to have to do the repairs. Or maybe the owner doesn't have the money to do all the repairs. Often, the owners live hundreds or thousands of miles away and don't have the time or energy to get involved with it. They just want it sold--no hassle, for whatever they can get. Those can be good houses to wholesale.
As for the fake "gurus"--yup, there are sure a lot of them out there. I have a Wordpress blog (in addition to the one here on Trulia), and I've written half a dozen items beginning "We Read This Cr_p So You Don't Have To" about gurus and their promotions. You can find it by Googling that phrase.
A few tips about identifying the fake gurus (not that difficult) and finding the few who are honest: A few have real estate licenses. There are some fairly strict standards about what licensed agents can or can't do. I think the few gurus I've run into who are licensed are actually pretty ethical. I do know a few "experts" who aren't licensed who are also ethical, but of the unlicensed ones, easily 60%-70% are frauds.
Next, are they still doing roughly what they're promoting? Now, times change and economic conditions change. So even the most ethical "guru" is going to alter his/her approach based on market conditions. But I'm thinking of a couple of "gurus"--one a Realtor, the other one not--who have been pretty consistent in their approaches for years. It continues to work for them. On the other hand, if your "guru" is a "flavor of the month" type, watch out.
Next, are the "gurus" reachable/contactable without paying a fortune? Many of the larger ones aren't. Some even operate coaching call centers and you never talk to the guru himself. But I'm thinking of 2--one in California, one in Virginia--who can be contacted directly. One has a weekly coaching phone call (free even to people who haven't paid him money) and you can speak to the great man himself. The other responds primarily via e-mail, but quickly and comprehensively.
Next, what's the guru's lifestyle like? There seems to be a pattern where the phoney ones are selling a dream lifestyle. They're always telling you (in e-mails, videos, etc.) about their latest trips to the Bahamas or Hawaii or wherever. The real ones take vacations, sure. But they're selling the skills and techniques, not the dreams.
Does the guru provide useful information for free? Check YouTube. Some of them post a lot of really helpful information. They'll actually show conversations with sellers, for instance. They show you how they really do it. The phoney ones do 90 minute sales-oriented webinars.
Would you be comfortable having a drink with a guru? The legitimate ones (judging from personal appearances, webinars, YouTube videos) are pretty much normal, regular folk. The phonies aren't; I wouldn't feel comfortable being at the same table with them. Don't assume that because they make your skin crawl, that they've got some huge secret for success.
Hope that helps.
Please be careful, the fact that you think a guru can teach you how to buy for pennies on the dollar is concerning and the reason that charlatans make a living. Be thankful you do not have the money for their coaching as they would certainly separate you from it. Be careful please.
Unless you have to put in many many dollars in it later?
Please let me know if you find one, I am interested in buying one too.
If you are in my area, I can recommend people that can help your "learn", but since you are in VA, google is your best friend.
Good Luck and hope you make many dollars on your investments.
Why don't I just buy it myself and make 90% return on my money? If I know how to do this, I don't need good credit or any credit at all. I am sure everyone will be lining up to hand me their money.
So my question to you is, do you know anyone that has actually done this?
If yes, why don't you ask him and share with us?
there are plenty of homes that you can buy for pennies on the dollar I am sure...but that is because the home is only worth pennies on the dollar! No one, in any market is going to sell you a home for less than they can get for it on the market, minus expenses that they save not being on the market...A home's value is based on its condition, so if it is selling for less than the home down the street that is similar, it is because it needs work or has a defect. Be careful, a good deal is such a horrible term. Unless you are a contractor that can do the work for yourself, you aren't really saving that much money on a "fixer upper" unless it needs massive amounts of repair, and as mentioned below, that holds a lot of risk, especially for someone that does not have A LOT of liquid cash funds sitting around in case everything goes south.
And the only way I know to buy a house "free and clear" is to pay for it in cash, which is not really free!
There are houses in Southern Virginia selling for less than 30K. Since you do have equity in your current house(s), you can contact a mortgage broker to get a loan against your equity, and purchase another property for cash. Another technique would be to secure a 203K loan. A 203K is a rehab loan used to purchase and fix-up a property in need of care.
Please visit my website at http://properties.rein.mlxchange.com to see some of these bargain houses.