experts: real estate column Wednesday, May 19, 1999

FORECLOSURES ARE NOT AN EASY MONEY MAKER

It is tough, it is tedious, and Judges always side with the owner.

By Ozzie Jurock

The Myths

  1. "You make a lot of money buying foreclosures".
    It is tough, it is tedious, and Judges always side with the owner. It sounds sexy, but it is an investor graveyard of time and effort wasted. I have seen very, very few foreclosures work for the investor.

  2. "Tax sales".
    A real fad (in the mind of some -- fanned by late night US TV shows). There are very few tax sales investors that are consistently successful in big cities. Probably none. There are some out of town properties that get sold in the boonies ... and for a good reason - no one wants them, even for the taxes owing. In the United States, the law is much tougher on people that do not pay taxes, liens, judgements and we have featured Washington sales a number of times in our newsletter. In the US it works, in Canada it doesn't.

  3. "Cities with Government as the major employer experience fast growth".
    In fact we predict the opposite. We placed Edmonton, Ottawa and Victoria on Investor Alert in 1995 for that reason. We voters are so disenchanted with Government that we want them to downsize. Downsizing means fewer employees. Fewer employees means properties are sold. Result: falling market. But things change, once cities are finished downsizing and prices have fallen accordingly, there will be a great upside for other fundamental reasons. The only exception may be in cities where land settlements are paid in cash and administered by a band. For a while they will become the major employer in town.

  4. "A good location outweighs the timing and trend identification".
    Never. A good location helps, but you always make more money faster if you get in at the beginning of an up-cycle or where you identify a new trend.

(the above is an excerpt of Ozzie Jurock's Book "Forget about Location, Location, Location")




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