Purchasing a foreclosed property can be a very profitable endeavor for the right buyer. The buyer should proceed with caution and consider whether he wants to purchase a rehab or finished property. There are many variables to be considered before making a decision as to which option will best benefit you the first time buyer. To be honest I have worked with both options and it really depends on how much time, money, and effort you want to spend on the process.

I could tell you horror stories about property virgins or newbies who got into rehabbing nightmares due to excessive costs for repairs, delays in obtaining materials, contractor problems and many more unthinkable situations. Believe me when I tell you that I have seen and heard it all. My general rule of thumb for those not accustomed to rehabbing is stick to minimum repairs like paint, carpet installation, and fixtures. If you go into more detailed repairs such as mold remediation, roof repairs, foundation damage, plumbing issues the costs tend to rise very quickly and can be very expensive. There will undoubtedly be factors that can not be seen by the naked eye. Even after you have done your due diligence in hiring a property inspector you will find that the tentative estimate in for the repairs may be shocking to your budget. Pricing will vary for a number of reasons: the cost of the materials fluctuates due to quality and style, and labor charges are dependent upon the expertise of the contractor.

Ok, let’s says you have worked out all of the particulars. The money is right, the contractor is reputable, and you have done all of your homework. Honestly, I admit there was a time when I thought that if all of the above was true and good then rehabbing would be a cinch! I did not consider how much time was involved in rehabbing or the price to be paid for “Piece of Mind”.

Believe me when I say I am not trying to discourage anyone from buying their dream home be it a finished property or a property that needs to be rehabbed. I just want to make certain that you the first time home buyer has carefully thought out the entire procedure. Do you have someone on board that you trust to monitor the repair process to your satisfaction should you be involved in other pressing matters? How much of your time are you actually willing to mandate for the rehab process? These questions and more should be a prerequisite before taking on any project of this magnitude.

If you or anyone you know is interested in finding a Real Estate Investor to help guide you through the maze of what can be a confusing and frustrating first time buying experience please contact me.

Christopher Shaw
CEO, My First Michigan Home Inc

Author's Bio: 

Christopher Shaw is a seasoned Real Estate Investor, with over 12 years of experience and has a passion for working with First Time Home Buyers, Mr Shaw has an ambitious goal of helping 1000 new First Time Buyers become home owners of the next 36 months.

In addition to the 1000 new home owners he expects to create over the next 36 months wants to leverage each transaction to adopt up to 1000 families through Volunteers of America's Adopt a family Program.