Real estate in Washington, Pine, Ramsey, and Anoka counties are in foreclosure all the time. If done right, substantial profits can be reaped by buyers of those homes. But, it is important to know the legal risks involved.
First, you have no rights to any prior information about the home. It could have mold, soil contamination, or other such things. You don't get the benefit of knowing what you are buying and are stuck with the condition of the home after you buy it.
Second, redemption of the home through the foreclosure process is strictly codified. You have to follow each step correctly and execute each step. If you don't, you could be facing a huge financial loss with no recourse.
Third, outstanding mortgage balances may not bear any resemblance to the home's value. You really should take a look at comps in the area to see what the value of the property is, both in its current condition (to the extent you can tell) and in an improved condition. A lender may have made a mistake in over-lending on the property, resulting in a negative equity position.
Don't get me wrong, there is a substantial upside to buying foreclosures. I just don't want to see your upside get wiped out by avoidable mistakes.
