Property Foreclosure

Buying Foreclosures: What to Say When the Seller Contacts You

Thu, 12 Jun 2008 11:28:00 -0500

If you’re ready to begin making real estate profits by buying foreclosures, you may have already started to do some advertising, contact the owner of a preforeclosure property, or spread your name through word of mouth. But buying foreclosures requires patience; the owner of a preforeclosure property may not contact you immediately. Many will wait until they feel they can’t do anything on their own before they call you.

But when a preforeclosure property owner does finally call you, make sure you convey that you’re a person,not a large corporate entity. Answer with, “Good morning, this is Mary.” A homeowner stressed by a looming foreclosure will respond more readily to the personal feel of talking with an individual than to the perception of being a number in a large, impersonal company. Even if you’re an expert at buying foreclosures, the owner of a preforeclosure home wants to know how you can help him.

When the owner of a preforeclosure asks for more information about you, tell them that you’re a private investor who specializes in buying preforeclosures. You can also say, “If your property qualifies, I may be able to take it off your hands and help you avoid foreclosure and stop further damage to your credit.” Convey that you have a solution to their problem.

When you’re buying foreclosures, it’s important to consider the frame of mind of the owner whose property is in preforeclosure. On the telephone, many preforeclosure property owners will feel very uncomfortable; they haven’t met you face to face, they’re in an unpleasant, embarrassing situation and they’re likely to be on the defensive.

Buying Pre foreclosures: Some Dos and Don’ts

Tue, 26 Feb 2008 14:59:00 -0500

Pre foreclosures are properties whose owners have defaulted on their mortgage payments. Bcause the lender wants to collect the outstanding mortgage balance, they begin the process of foreclosure, scheduling a public foreclosure auction. Up to the point of foreclosure auction, the property is in pre foreclosure.

Though buying a pre foreclosure property can be a great investment deal (because it’s usually sold for a price considerably below market value), some pre foreclosure deals are better than others. Here are some dos and don’ts to keep in mind. If you plan to live in the pre foreclosure, you’ll still want to assess your potential repair costs, but it might be possible to make the repairs over time.

Do perform a title search on a pre foreclosure home before you get serious about it. Usually, any liens and unpaid property taxes will become your responsibility.

Do be aware of any renovations or repairs that will be necessary in order to resell the pre foreclosure property. If you’re investing in the pre foreclosure to turn it around at a profit, be sure that the cost of repairs won’t cancel out any profit you could make. If you plan to live in the pre foreclosure, you’ll still want to assess your potential repair costs, but it might be possible to make the repairs over time. In either case, it’s not a pre foreclosure deal if it’s a money pit.

Do pay attention to location. Though you can find inexpensive pre foreclosures in “risky” neighborhoods, the best pre foreclosure deals are those in safe, pleasant neighborhoods that will be desirable to potential buyers when you sell.

Don’t overpay. Stick to your budget. It can be easy to get caught up in a bidding war, even before the foreclosure auction, either with an owner who is trying to get the most out of the sale, or with another potential buyer of the pre foreclosure.

Don’t take a blanket approach when looking for pre foreclosure deals. . Spreading yourself thin is a waste of time and energy. Focus on pre foreclosures in just a few zip codes. This allows you to be “the expert” on that area.

Following these pre foreclosure investing dos and don’ts can save you time and money, and maximize your investment benefits.

Preforeclosure Investing: There’s Money in Distressed Property

Sat, 02 Feb 2008 12:02:00 -0500

If you’re in the market for sweet real estate investment deals, distressed property (preforeclosure property) investing can be among the sweetest, offering the opportunity to buy property priced well below market value.

The preforeclosure period is a window of investment opportunity for you, the investor, because homeowners are likely to be very motivated to sell their distressed property to avoid the foreclosure auction. This means that you can often buy it at a price well below market value. In addition, buying a distressed property during the preforeclosure period is usually easier (and often require less cash outlay) than competing with numerous others at the foreclosure auction.

Distressed property is not always preforeclosure property; it can be one of several types of real estate, but generally, the term distressed property refers to property that is in preforeclosure, awaiting public foreclosure auction. . (Preforeclosure is the period from the time a homeowner is first considered in default on mortgage payments to the time of the foreclosure auction.) The bank schedules the foreclosure auction for the distressed property in order to collect the homeowner’s outstanding debt.

Keep in mind that a distressed property is often a “fixer upper.” If the homeowner has had financial difficulties to the degree that his property is in preforeclosure, it’s likely that he has not been able to keep up with repairs, either. Remember that when you buy distressed property that is in preforeclosure, you generally buy it “as is.” Remember that when you buy distressed property that is in preforeclosure, you generally buy it “as is.” Make an effort to identify needed repairs and price them before making your preforeclosure investment. Be sure that your cash outlay for repairs won’t cancel out your profit potential.

You can find preforeclosure properties in several ways. Search for County Recorder preforeclosure data online. Or look in the "Legal Notice" section of the local newspaper for foreclosures and upcoming foreclosure auctions. Consider subscribing to a multiple listings service (MLS), which provides distressed property listings as well as information on finding the best preforeclosure deals.

If you’re willing to put in some time to locate distressed property, and if you exercise some care to assess your repair costs before buying, your preforeclosure investment can result in a tidy profit for you.

Making Money with Real Estate: Pre Foreclosure Investing

Wed, 16 Jan 2008 11:37:00 -0500

Interested in making money with real estate? Consider pre foreclosure investing ― a great way to begin making money with real estate, without the usual financial scrutiny. But before you start in the world of pre foreclosure investing, you should understand a little about the inner and outer process the owner of a pre foreclosure property may be going through.

You have about three weeks (the usual pre foreclosure period before the foreclosure auction) to contact the owner of a pre foreclosure property, as well as complete the paperwork and title search, obtain funding, etc. Navigate the pre foreclosure period well, though, and you’ll be on your way to making money with real estate.

It’s important to consider that most owners of pre foreclosure property are highly stressed and may be mad at the world for the situation they’re in. At first, they may not be friendly or open to your offer to buy their pre foreclosure property. Though your goal is making money with real estate, their goal, though they may not know how to achieve it, is making it all go away.

So, your more immediate goal is not making money with real estate, but making them realize that you can help them make it all go away, by buying their pre foreclosure property. Help them realize you can rid them of the mortgage debt they’ve fallen behind on, and help their credit remain as unharmed as possible.

One way to begin reaching homeowners in pre foreclosure is by mail. Make your mailings stand out from the barrage of mail pre foreclosure owners are getting from debt collectors. Send them a different colored friendly postcard every few days. Or try hand-addressed “lumpy mail.” This keeps you in front of them as they’re thinking of their alternatives. They’re likely to become curious and give you a call. Or, it may be that the homeowner is already ready to find someone to buy his pre foreclosure property as quickly as possible; in that case, your mailing will have arrived with perfect timing.

Once the owner of the pre foreclosure property sees that you offer hope, he is likely to become very motivated to work with you to end the stress associated with the pre foreclosure situation. Yes, you’ll be making money with real estate, but you’ll also be helping the homeowner out of an extremely painful situation.

Preforeclosure Investing: Why You Should Have a Target Area

Mon, 24 Dec 2007 17:31:00 -0500

Many preforeclosure investors spend time and money going after preforeclosure properties, and they end up with poor results. . This happens often because investors take a blanket approach; they look for all preforeclosure properties in their city, for example, instead of focusing on just a few counties. Focusing on quantity rather than quality in preforeclosure investing can keep you from making smart real estate investments in the long run.

Why is it smarter to focus your efforts on a more limited area when looking for preforeclosure investments? You’ll make informed investment decisions.

Here are some tips for becoming a preforeclosure investment specialist for your targeted location:

Choose only a few zip codes for your preforeclosure investing, and become familiar with the real estate market in those areas . This will help you make smart decisions on what to offer for preforeclosures in those areas. You’ll have an idea of the price you can resell them for, and how much the preforeclosures are likely to be worth in the near future.

Be on top of the local issues in your selected preforeclosure areas. You’ll become aware of issues that can positively or negatively effect your preforeclosure investment. For example, you’ll be aware of commercial rezoning plans and new road construction, which could impact the resale value of the preforeclosure investment you make now.

Be aware of what’s going on in the school district(s) associated with your targeted preforeclosure investment area(s). Such issues as plans for changing school district boundaries can make a preforeclosure investment a future gem or lemon.

Focusing on only a few zip codes for your preforeclosure investing will position you as the expert on that area. Not only will you be savvy to the high resale preforeclosures in these areas, but you’ll also be seen as a “go to” person. This could lead you to more potential preforeclosure investment opportunities.

Real Estate Investing: Getting the Best Preforeclosure Deals

Tue, 04 Dec 2007 13:27:00 -0500

Most people who are savvy at real estate investing would agree that investing in preforeclosure property can yield lucrative real estate profits. But those who reap the best preforeclosure deals are the ones who exercise patience and diligence by shopping around.

When looking for the best preforeclosure deals, here’s what to keep in mind:

Condition of the preforeclosure property – Homes that have been neglected may not be the best preforeclosure deals. To avoid expensive surprises later, always have a professional inspection and assessment of the preforeclosure property you’re considering. The best preforeclosure deals are those that require simple, inexpensive repairs, or repairs that can be done by you. You want to avoid letting your profits be eaten up by the cost of getting the preforeclosure property into saleable condition.

Location, location, location – Though you can find inexpensive preforeclosures in “risky” neighborhoods, the best preforeclosure deals are those in safe, pleasant neighborhoods that will be desirable to potential buyers when you sell.

Profitability – Whether you plan to sell the preforeclosure property for profit, or plan to live in it yourself, make sure that the price is below the property’s actual value. Ensure that you can sell the preforeclosure property – whether immediately, or in the more distant future – at a profit. Otherwise, it’s not a preforeclosure deal; it might as well be just any full-price piece of real estate.

In today’s real estate investing market, preforeclosure deals abound. But the very best preforeclosure deals happen when investors consider the above three factors – condition, location, and profitability – before making their preforeclosure investment.

Preforeclosure –5 Other Alternatives Homeowners May Be Considering

Sun, 11 Nov 2007 10:55:00 -0500

Buying preforeclosures can be a highly profitable real estate investing opportunity. If you invest in preforeclosure property, however, (or if you plan to), you need to understand the other options that a homeowner who is currently in preforeclosure or who is facing preforeclosure may be considering.

Forbearance Agreement – A homeowner who is in default, but not yet in preforeclosure, may be allowed to make low mortgage payments or no payments at all for a period of time (commonly 3-6 months). After that period of time, however, the homeowner is usually required to make payments that are higher than the original monthly mortgage payment until the loan is brought up-to-date.

Special Forbearance – If the homeowner has an FHA loan, he may be eligible to postpone making mortgage payments for a minimum of four months to avoid lapsing into preforeclosure. There is no limit to the number of months the homeowner may postpone payments, but payment delinquency is usually not permitted to exceed the equivalent of 12 monthly PITI installments or the preforeclosure process will continue.

Loan Modification – Homeowners can avoid preforeclosure with a loan modification, which changes one or more terms of their mortgage. It is difficult for a homeowner to be granted a loan modification to prevent the preforeclosure process unless there are justifiable reasons, such as extreme hardship.

Reinstatement Loan –Known as “cure,” a reinstatement loan allows a homeowner whose property is in preforeclosure to avoid foreclosure auction by paying the lender a lump sum payment that includes missed payments, late fees, legal fees, foreclosure costs, and all principal owed during the period of preforeclosure. But this option presents a high risk to the homeowner who is trying to avoid preforeclosure, because it often involves the seller deeding the property over to the investor (who will cure). If the lender accelerates the loan, the homeowner, who no longer owns the preforeclosure property at this point, will have no recourse if the investor doesn’t pay the loans.

Repayment Plan – Homeowners whose properties are in preforeclosure may make a written agreement with the lender to make higher monthly mortgage payments than the regular monthly payment amount until the mortgage is no longer delinquent.

The above are commonly considered alternatives for homeowners who want to avoid preforeclosure, or who want to avoid losing their home at a preforeclosure auction. Understanding the pros and cons of each will help prepare you for your negotiations with a homeowner who is in preforeclosure, or who wishes to avoid reaching the state of preforeclosure.

Author Reveals How He Earned $77,300 With One Preforeclosure

Mon, 01 Oct 2007 13:09:00 -0500

I have had a lot of requests from subscribers asking me to write about one of my preforeclosure deals in detail. They wanted to know
exactly what I do to make a tremendous profit on a preforeclosure. Here’s how I profited over $75,000 on ONE preforeclosure and how you can too.

Using the exact same methods contained in my courses, I found a preforeclosure that the owner wanted to sell right away. I knew the house would be worth $300,000 if it was fixed up properly.

My very low offer of $152,000 was accepted by the homeowner. He was happy to sell the preforeclosure house at this price and just wanted to get rid of it because it needed a lot of repairs. To the homeowner, the preforeclosure house was a pain in the neck.

I went to my local bank and asked if I could borrow $150,000 so I could purchase the preforeclosure. My banker said he would loan me $120,000. I now had a problem. I did not have ANY MONEY at the time because I had it tied up in other preforeclosure deals. I was getting ready to lose one of the best deals of my life!NOTE: I am aware that many of you do not have a bank you can work with. Many of you have credit that isn't so great. Some of you don't
make enough money to get bank loans for preforeclosures. That's okay because I'll show you easy ways to get money for preforeclosure deals WITHOUT going to banks.

Okay, on with the story. So what did I do to get the money for this preforeclosure deal? Well, I borrowed $28,000 on my credit cards and scraped together a few thousand more from friends. I now had enough money to acquire the preforeclosure house. Was this risky? I didn't think so. Not when I had just paid $152,000 for a preforeclosure house that would soon be worth $300,000.

Note: You do NOT need to have credit cards or ANY money for your preforeclosure and probate deals. I will teach you how to find
investors who are willing to put up ALL of the money for your preforeclosure deals.

Now I had another problem. I had to find some money to get the preforeclosure fixed up. I approached some friends who had their money sitting in a Money Market Account that wasn't paying them much. I told them that if they would loan me $20,000 I would give them 13% interest, which was over twice as much as they were getting. The loan would be secured by the preforeclosure, so they were in a safe position. They made the loan to me and I now had enough money to get the preforeclosure house fixed up.

Guess what? ELEVEN HOURS after the preforeclosure house was fixed up and listed for sale, it sold for the full asking price of $300,000. I went to settlement and picked up a FAT CHECK. My total profit was $77,300. Do you think this was a preforeclosure risky deal? ? If so, let me give you two examples of how you could have accomplished this very same preforeclosure deal using very little, or none, of your own money. You will not make quite as much as you would if you did the preforeclosure deal yourself, but as you will see in the examples below, you would still do very well.

Example #1: The Fast Preforeclosure Profit Since you have a contract to purchase the preforeclosure house for $152,000, you
could easily take your contract and RESELL it to an investor for $10,000, $20,000 or more. How many people do you think are out there
that would love to get a $300,000 house for $162,000 or $172,000? This is called “flipping” a preforeclosure house and is the fastest way to earn a huge profit in real estate. It is completely legal and done all the time in every state in the U.S. The best part about flipping preforeclosures is that it can be done with only a $10 contract deposit!

Example #2: A Bigger Preforeclosure Profit Within Three Months You could easily find an investor who would put up ALL of the money for
the preforeclosure deal in return for one-half of the profit. You would pocket $38,650 for finding a good preforeclosure deal like this one. And you would not use ANY of your own money. Do you think there are plenty of people in your area who would love to make a fast $38,650 on a preforeclosure deal? When partnering with a preforeclosure investor, it will take a few months longer to get your profit than it would when quickly flipping the preforeclosure house, but you end up with a much larger share of the profit.

There you have it. A real-life example of one of my recent preforeclosure real estate deals.