Tips for making money when you buy foreclosed homes

Buying foreclosed homes can be very lucrative.  However, you must follow a few simple rules to tilt the odds in your favor:

• Never buy foreclosures that you would not live in yourself.

• Buy foreclosures in areas where home prices are stable or appreciating unless you really know what you are doing.

• Buy foreclosures that only need cosmetic repairs.

• Buy foreclosures that are not so expensive that the number of buyers or renters is limited.  

• Buy foreclosures at or below market value.  You can check the market value by comparing the foreclosure price to similar homes that have sold in the same area.