Real Estate Foreclosures – An Alternative

If you have the desire to start your own business and get yourself a start-up kit form someone who will tell you the “insider secrets” on how to do it, you will have no shortage of materials to buy. Most of these are not very good. Some of the material that is good, the market may not be a good as it first seemed.

Let’s examine one of these markets – real estate foreclosures.

I spent a year trying to buy foreclosures for profit and never did. I did not just piddle with it either. I was very serious and dedicated a lot of time to it. Here is my story. First a few facts


  • Every foreclosure that goes to auction has about $5,000 – $10,000 of legal fees tacked onto depending on your state
  • It is difficult to find out what will be sold on auction day. Most foreclosures go through a handful of law firms. These firms do not want to take calls from potential buyers all day asking them what is going to sell. That cost them money to have someone take those phone calls and you calling them does not help their business
  • If there are 100 properties in a county that are scheduled to go to auction in a month, only 20% will be auctioned
  • One cannot go inside a house that is slated for auction unless you can sweet talk your way in. These people are not listing their house for sale, it is being sold for them
  • Most houses that are foreclosed on have liens that are less than three years old. This means the current owner has very little equity in the property
  • If you buy the house, you could be buying liens against it also. You have to search county records to find out
  • Foreclosures auctions need to be settled with cash or cashiers check


Knowing all this I did my homework, I knew the market price a house could sell for, I took pictures of the houses, I got inside a few, I had an estimate of what it would take to get it ready for market. From all this I was able to determine what my top bid price was on every property.

At the auctions, 90% of the properties had a STARTING bid over my top price. When you look at the equity they had a plus the attorneys fees, it just went up. Out of what was left, I wound up bidding against realtors. A realtor has a cost advantage over a non-realtor because they do not have to pay listing fees. I did buy two houses at auctions. On each one, I got a phone call the next day saying the owner worked out a deal with the lender. I got my money back. I was able to find out that this happens on about 50% of sales.

Bottom line with 100 houses set for foreclosures, here is what happens

20 sell at auction
18 sell higher than a top bid
1 that sells is refunded

That leaves 1 house to buy and you compete with some one who has a cost advantage.

Many people make money on foreclosures, but it is a hard industry to break in especially considering the cash needs. Regardless of all the things going against it, buying foreclosed homes attracts many people looking to make extra money.

If someone is looking to make extra money, why not consider an easier market to break into. Would a market that has the following characteristics be more attractive?


  • The entry point is a little as a two hundred dollars
  • Many people will not go into the marketplace as a dealmaker because they look down on the industry for no real reason. This means more opportunity for those in it
  • More deals to spread the risk around
  • You sell to people who are already emotionally attached to your product
  • Deal turn around ranges from 1 week to a couple of months
  • Average deal return is around 15%
  • The more you do the, greater the probability of investing in deals that can return 500%
  • All online
  • Nationwide deals are available


The industry we are talking about is ticket brokering to concerts, theater and sporting events.

People can get started with a few hundred dollars or have thousands of dollars in inventory. Many people turn their nose up at this industry because they call it “scalping”. While we make no attempt to shy away from the scalping moniker, we do ask the question – “what exactly is wrong with buying from the source and selling it at market prices?” Since when is capitalism a bad thing?

One can be a ticket broker from their home computer and do as many deals a week as they want. There is nothing limiting you from buying and selling for events all over the country.