When a bank finally gets hold of a foreclosed property, they will quickly and swiftly find a way to get it sold to try and recover most if not all of the mortgage principle and to try and get back some of the costs they incurred to foreclose the property and to maintain it after the legal action.
Many of these real estate owned houses that are on the banks financial books can be found by either talking to your local bank or even to the realtors in your area. Real estate companies really keep an eye out for these type or properties for their investors, and for someone looking for a home or condominium.
Many foreclosed properties are sold for well below their true value as banks are just trying to get their money back. They are not as concerned as making a profit as they are about balancing the books. Banks make most of their money on the interest and fees from someone who is paying the mortgage on time and this is where their true interest lies. They really don not want to own property, but once they do will find a way to get it sold.
It may even be possible to just take over the current mortgage of a property. Even though this may not seem like a good way to take over home, sometimes the mortgage is well below the true value and the lender is more than happy to get someone paying back the note.
The profit of buying a foreclosed property usually takes a couple years to see, but may be seen in as little as a year if you find the right property. There are many properties available in each state, so take the time to do the research and take a look at what the past values were of the neighborhood, and what the current values are. This may be a simple way of looking at it, but you may see the potential value this way.
If you find that the mortgage is rather low than you may be able to rent it for a while to help recoup some your costs. You could even take any profit you make from the tenant and update the property or add-on to its ad value for the day you finally do sell it.
This is a rare time to buy a foreclosed property, so if you want to take the chance it may pay off for you. Talk to your local realtors about any foreclosed property auctions, and what they think about properties you may want to buy for their opinion on the local neighborhood.