The phrase "product research" strikes fear in the heart of real estate buyers and investors everywhere, especially ring with horror in boom times like now when we are in the thick of foreclosures.

 The popular misconception of doing property research is that hours upon hours needed to be spent at the local recorder's office, sifting through countless pages of real estate documents, which do not have much entertainment value.  However, despite the tedious affair of collecting this important information, it is of vital importance to do so, especially for determining Comparable Sales and the Lien & Loan History. 

By doing a comparable Sales, you will see listing of properties recently sold in the geographic area, with up to 15 selling prices, that will help you gauge exactly what you should be offering to the seller.  By researching the Lien & Loan History, you'll find out the listing details the mortgages and trust deeds that are registered to your target property. These figures aid in calculating the total debt on the property.

Luckily for real estate investors like you, the crucial information found only through a thorough investigation can be obtained in ways that were not available even 10 years ago, and it can be done very easily.  This preparation only enhances the possibilities of obtaining the right property to make a strong investment.

Before the influx of Web-based information portals, only licensed real estate brokers and investors had access to the information.  Now everyday-investors can  easily access those pieces of information needed to make an educated offer on a property, as well as resources to assist in procuring properties and polishing your hunt for wise investments.

Due diligence and scrutiny of all the particulars of an investment property are absolutely necessary to making sure that you are getting what you need.  This logic applies to both foreclosure properties and retail properties.  One of the first steps to take, as mentioned earlier, is to ascertain the debt burden provided in the Lien & Loan History documents.  This dollar amount should then be subtracted from the estimated market value as seen from Comparable Sales.  This calculation will give you a rough estimate of the revenue potential of the property.  You can further pinpoint a value by arranging a walk-through with the seller.  Use this opportunity to gauge the costs of repair an remember to have a professional inspector check the property, which will cost you several hundred dollars, but it money well spent.  Finally, have a title company run a check on the title to see if theer are encumbrances, liens against the property.

In the event you attend a public foreclosure auction, property inspections typically are not allowed, which add much uncertainty to the value of this sort of transaction.  If you have had the opportunity to research the property beforehand, including the title's history and feel that the auction price is far below the market value, then it is safe to say that you can be in position to absorb any unforeseen costs and still come out of the deal.  As a rule of thumb, have a pre-set maximum bid amount, which would be based on your research, and do not stray from that figure.

While bank-owned properties may allow for inspections, banks usually have very little information about the property and its condition.  So this ability to inspect becomes important, especially since banks will divest themselves of the property "as is".  This status frees the bank of liabilities for repairs that they did not divulge at auction.  It is best to have a professional inspector examine the property, and also to incorporate the costs of the known needed repairs.  As mentioned earlier, also have a title company check the title, even if the bank has already cleared the title before selling.

A smart investment starts with smart research, no matter how small or large the property.  Your best bet in rooting out all of the lemons is by preparing yourself with as much knowledge about the property beforehand.  Seeing as how the background information is much easier to obtain, there is no excuse to not be an educated investor.  A small investment in time and research can result in a big payoff!