How to Buy Foreclosures and Short Sales

My post contentInvesting in foreclosures and short sales can be a powerful way to buy rental properties at a discount — especially in today's high-priced market. However, these types of deals come with unique risks, timelines, and negotiation challenges that many new investors aren't prepared for.

In this guide, you’ll learn:

• The difference between a foreclosure and a short sale

• How to find these properties online

• What to watch out for (title issues, delays, etc.)

• How to get started safely, even as a beginner

🏚️ What Is a Foreclosure?

A foreclosure happens when a homeowner fails to pay the mortgage, and the lender repossesses the property. These homes are often sold “as-is” at below-market prices to recover the unpaid loan balance.

There are two types of foreclosure purchases:

1. Auction (Trustee Sales): Requires cash, limited inspection, high risk.

2. REO (Bank-Owned Properties): Listed on MLS with a real estate agent, often safer for beginners.

🔻 What Is a Short Sale?

A short sale is when a homeowner sells the property for less than the amount owed on the mortgage — with the lender's approval. These deals can take weeks or months to close but sometimes offer better condition properties and fewer title issues.

🔍 Where to Find Foreclosures and Short Sales

Here are the best platforms for finding these deals:

• Zillow & Realtor.com: Use filters like “Foreclosure” or “Pre-Foreclosure”

• Auction.com, Hubzu, Xome: Online foreclosure auctions

• Local MLS: If you're working with a licensed agent

• County Tax Auctions: For advanced investors only

If you're just getting started, avoid courthouse auctions and focus on REO listings or short sales with agent representation.

⚠️ What to Watch Out For

Buying distressed property is not for the faint of heart. Look out for:

• Unpaid liens or back taxes (get a title search!)

• Eviction of previous occupants

• Major repairs — many homes are neglected or vandalized

• Slow lender approvals (in short sales)

✅ How to Start Safely (Even as a Beginner)

If you're brand new and want to invest in foreclosures or short sales the smart way, we recommend starting with education from an expert. Here's a step-by-step training specifically designed for beginner investors:

👉 Build a Fortune with Real Estate: Foreclosure & Short Sale Training

This online course shows you:

• How to analyze deals in seconds

• The documents you need

• How to negotiate with banks and sellers

• How to avoid the common traps most investors fall into

💡 Affiliate disclosure: We may earn a commission if you purchase through this link, at no extra cost to you.

Foreclosures and short sales are some of the best ways to buy discounted properties, especially in hot markets where cash flow is tight. But they require the right tools, education, and expectations.

Start with knowledge. Learn how the process works, then begin scouting deals in your local market or remotely.

Would you like help evaluating a foreclosure deal? Reach out anytime through our contact page — we’re here to help remote investors succeed.