Typically all "Get Rich" via Real Estate Investment Tapes, Seminars, Clubs, and other "You too can do what I have done" approaches to Real Estate Investing lack some important ingredients - they are based on general principles and techniques that do work, but the devil in the detail is how to implement these principles and techniques within a local area, operating primarily as a sole individual investor.
The real issue is obtaining the proper information and leads for the Hot Zones of opportunity - in other words, determining the best location for investment, based upon such factors as Growth, (or Lack Thereof), Declining Subdivision Performance, Year Built, Assessed Values, Age of Owners, Equity, etc.
Most of the Real Estate "You can do it too" approaches focus on obtaining either Tax Sales or Foreclosure Sales from a Homestead Filed property. There are significant differences in Property Tax Codes that affect Homestead Tax & Foreclosure Sales and Non-Homestead Tax & Foreclosure Sales , as they relate to Recapture Periods, Amounts, Percentage Profit, etc. These approaches also focus on such tactics as Locating the Former Owner and Solicitation of Pre-Tax or Foreclosure Sales. We will address these Hot Zone candidates later. Remember, a complete understanding of the Texas Property Code is a necessary pre-condition before attempting to purchase Homestead or Non-Homestead Tax Sales, Delinquent Tax Sales or Redemption Sales by taxing authorities. It is also a very good idea to include an Attorney certified in Real Estate Law and Taxation on all transactions.
Nearly all Real Estate Investment approaches consider these factors but leave the discovery of the hot zones of opportunity to the individual to locate, farm and harvest. Most employ the Sale On the Courthouse Steps approach, using the Delinquent Tax Sale of Homes to obtain that first success. In reality, while this approach works, it is the least attractive successful investment option and is highly labor intensive; ie: Drive-Bys, Site Visits, Market Research, Court House work, etc. Most importantly, you are competing on the courthouse steps with may others who have the same desire and vision and there can be only one winner.
Additionally, in the State of Texas, this approach leaves the Two-Year Potential Recapture Of The Home By The Original Owner for only your original cost, plus any actual cash improvements, NOT the current market value based on your labor and investment. As an investor, while you bet on the probability that the home will not be recaptured, and you will be free to sell it and garner a profit, your cash is tied up and you are left with only a rental property. Because of the potential recapture, lenders will not assist you, so you are left with few, if any, options.
