While not everyone can afford this option, you would be surprised at how average-income families can be resourceful and find a way to buy another home while holding onto their previous one as an investment. The best thing to do is talk to a Colorado Springs property management company to help devise a strategy for your particular home. The ability to keep a positive cash flow by keeping your Colorado Springs home rented out to good renters and keeping maintenance expenses at a minimum will depend on how good your property manager is. (By far the best in the area is The Ashford Real Estate Group, 719-314-6057.)

Why isn’t short sale investing always profitable, whether it’s in Florida short sales, California short sales, or Colorado short sales? Because the reason the property is a short sale in the first place is that its value was over-inflated by the lenders in order to lend more money against it. Just because you are buying it cheaper than it was valued previously doesn’t mean it can’t be valued even less in the future.

All this is not to scare you away from purchasing short sales as investment property. It is only to underscore the need to get an experienced short sale negotiator on your side when making an offer on a short sale property. It’s important to find someone local. If you’re looking for a Denver short sale, find a Denver agent who is a short sale expert. Without such experts working for you, you are likely to fall victim to delays, price hikes (that’s why it’s called a negotiation), and bureaucratic frustration from bankers who don’t want to be the business of selling real estate.

There are tips and tricks that only the experienced real estate agent, who has negotiated many favorable short sale purchases successfully, knows. A short sale specialist will keep you from offering too high. A successful investor knows that most of the profit comes on the offer not the sale of the property. Don’t put off your profits until the sale.

Make an offer that makes your investment strategy work, don’t rearrange your investment strategy around the specifics of the deal. If the deal doesn’t match your criteria, or the bank doesn’t want to play ball, walk away. There are many others short sale properties to choose from. The right bank with the right owner in the right situation will make the deal you need to earn a respectable profit off of your investment, whether your strategy is flipping short sales or holding short sales long-term as rental property.

The foreclosure laws varies from state to state, and the home owner or prospective foreclosure investor must perform some due diligence to get the most leverage in negotiating favorable terms. CO foreclosures, for instance, can be either judicial foreclosures or non-judicial foreclosures. This means that the process can be initiated in a courtroom or by the lender directly as a result of what’s called a “power of sale clause.”

The power of sale clause gives a private lender the authority to sell a Colorado foreclosure if that clause exists in the original contract, because it pre-authorizes such a sale when the terms of the loan are breached. A judicial foreclosure, of course, is necessary when no such clause exists in the terms of the loan, and the lender needs to bring the borrower to court to initiate Denver foreclosure proceedings.

In the case of non-judicial proceedings, the system in Colorado requires attorneys for the lender to file documents with the Office of the Public Trustee, a governor-appointed officer local to each county in the state. At that point, the Public Trustee must file a Notice of Election and Demand, which must be published for five weeks in a local newspaper.

The borrower in each state has specific rights that are outlined in state law, and give an amount of time to “cure” the bad debt. In Colorado, the owner can file an “Intent to Cure” document that will stop proceedings within 15 days of a foreclosure sale. The borrower does have up to 75 days after the sale to redeem the property for the price of the sale plus interest. Each case is unique, and borrowers and investors alike should seek legal and professional consultation to ensure their interests are represented fully.