I am not sure exactly what you mean by a “foreclosure business.” During the last downturn there were a few hearty souls who made a living buying foreclosed properties, fixing them up, and either renting them out or selling them.
In order to get started in THAT business you don’t need to buy a “foreclosure business,” but you do need to have a VERY GOOD understanding of the judicial foreclosure process. Having a handle on real estate values (where the market REALLY is) is important. You’ll need some knowledge of construction and repair costs. Finally, you’ll need some capital. Oh…some luck would also help.
I spent an afternoon with a friend several years ago (during the last down cycle) driving around Pasadena looking at homes that were about to be foreclosed upon. Much of what we saw looked awful from the outside, but I am sure there were some “diamonds in the rough.”
I think the best thing to do would be to specialize in an area where you think there will be a good number of foreclosures. (Say Downtown Condos!) Know the buildings, floorplans, rental prices, and realistic sales prices for properties in that area. I am sure there are books you can get on the subject. Go to a few foreclosure sales but DON’T bid on ANYTHING until you know what you are doing.
