Buy Foreclosures? Good or Bad Idea?

I get quite a few inquiries each day of homeowners looking to sell their home that is currently in foreclosure.

It got me thinking…is buying foreclosures a good investment strategy? Not that I have the money to do this right now, but it just got me thinking that I might be missing out on a big opportunity.

In my own home sale, my house was in foreclosure (but it did not go to auction) when it was bought for significantly less than what I had paid a year previous (and this was before housing starting slumping in Seattle). In other words, the buyer got a steal of a deal because I was facing foreclosure and needed to sell quickly.

I think this would be incredibly risky in the current real estate market, but I imagine there are people are there doing this.

There must be, because I was getting dozens of letters each day from “investors” wanting to buy up my property quickly. Not sure if they are all out of business now or not.