The Wall Street Journal
talked to Mark Allen of Gorilla Capital, which buys and sells
foreclosed homes, about how to buy foreclosure properties as an
investment. Allen said that even though a neighborhood “looks run down
and you might not want to live there personally,” the home still has
potential to sell to someone who can afford it. Allen said to avoid
neighborhoods with multiple foreclosures, be aware of back taxes that
need to be paid and only buy the first mortgage of a home. If an
investor wants to rent out a home instead of sell it, Allen said to
plan to charge rent that totals 1 percent of the purchase price, and
expect to spend about $15,000 to $20,000 on renovations, but avoid
homes that need major work.