Buying Foreclosures Worth the Trouble?

Likewise, if you plan to flip the house, get a good grasp of what comparable properties are selling for.

You can conduct this market analysis yourself via local newspapers and county documents. However, you might also consider hiring a Realtor to get a professional take on the local market.

Finally, err on the conservative side when you determine how long it will take to find renters or to sell the property.

Know Your Limitations

It's possible to make an excellent living buying and selling foreclosure properties, but as in any other business, you have to know what you're doing.

Be selective as you assemble your team, which will likely include a contractor and a real estate broker. Their knowledge of the local market can provide valuable assistance as you learn the ropes.

In the end, whether or not the foreclosure business is for you depends on your resources -- and not just the financial ones.

"You have to ask yourself how much work am I willing to do, how much money am I willing to spend and how much time can I give," says John Anderson, a foreclosure specialist and a broker with Twin Oaks Realty in Minnesota.