When you’re looking for real estate investing deals, especially if it’s foreclosure properties you’re interested in, you can often find good real estate investing opportunities by literally showing up and knocking on the doors of owners of preforeclosure home. (A preforeclosure is a home that has entered the foreclosure process because the homeowner has missed several mortgage payments.) You’ll get a jump on the many others who have the same information you do about these preforeclosure properties.
Let’s say 100 others in the real estate investing business have the Notice of Default information about a preforeclosure home. Out of those, possibly half will mail a postcard or letter, once, to the owner of the preforeclosure. Ten percent will bother to track down a homeowner’s telephone number and give them a call about the preforeclosure. But only about two or three will actually show up on the homeowner’s door and knock. Often, NO ONE shows up at the homeowner’s door!
Of course, knocking on the doors of preforeclosure homes can be time consuming, and may not always be worth your time, but if the homeowner has a great deal of equity, and/or the preforeclosure home is in a desirable area where you are interested in long-term real estate investing, you may end up with a great real estate investing deal.
If the preforeclosure home doesn’t meet one of the two above criteria, don’t waste time paying them a visit. Instead, give the owners of the preforeclosure a phone call or target them for your mailings.
If you’re thinking that the owner of a preforeclosure home won’t want you to knock on their door, remember that in many cases, the owner is in desperate need of help. The owner of a preforeclosure would like to avoid having his property sold at a foreclosure auction. This is where you have the opportunity to help him, and he has the opportunity to preserve his credit as much as possible by selling the preforeclosure home before it reaches the final step of foreclosure.