Posts Tagged ‘pre-foreclosure’
-
What Makes Pre-Foreclosure Investing A Dominant Approach To Buying Houses
How do you know which real estate investing strategy is best for you?Many years ago, we learned about the power of foreclosure investing. If you had to try and explain foreclosure investing, you could throw a wide net over everything from a homeowner missing their first mortgage payment all the way to the foreclosure property selling at the courthouse steps.
Then came pre-foreclosure investing.Pre-foreclosures begin with a notice of default being filed at the local courthouse and leads all the way up to the Sheriff sale or foreclosure auction.
Reason #1 Sellers Have Compelling Reasons To Sell
I don’t know why sellers who get into this situation end up doing the same thing virtually every time, they just do.In virtually every case when this situation develops, the property usually falls into pre-foreclosure.Usually when someone falls behind on the mortgage payment, its very difficult for them to catch up and regain that former financial stability.
The leading factors that cause someone to fall into pre-foreclosure are:
1. Divorce
2. Loss of job
3. Extended or prolonged illness
4. Employment transfer
5. Drug and/or alcohol abuseHomeowners who find themselves in pre-foreclosure almost always have to sell in order to avoid having the house sold off at auction. Experienced property investors know that when they help sellers first, they are then rewarded with these steeply discounted investment properties.
Reason #2 Less Competition
Many real estate investors don’t know how to evaluate a market and find the most profitable investment properties.These so called real estate investors search through the classified ads each week and focus on buying investment property at retail prices. Some of these investors may work with a real estate agent and attempt to find invesment property – but these are still listed properites with retail prices.You’ll never make it as a pre-foreclosure investor if you’re paying too much for investment property.You must learn to buy at wholesale or even lower.
Experienced pre-foreclosure investors don’t pay “retail prices” for investment property and they normally don’t work with real estate agents.These investors are well trained in locating the best real estate deals in town.Pre-foreclosure investors don’t wait for the action to come to them – they go out and find the action.
Now some pre-foreclosure investors mail out postcards and letters and some even make phone calls to homeowners who are in pre-foreclosure.I have found the most effective approach to pre-foreclosure investing is to physically travel out to each house and meet with the homeowner.
This approach to real estate investing offers the highest return on your investment along with the least amount of competiton.Pretty good combination if you asked me.
-
Seven “Buy Signals” That Make Property Deals Scream For Pre-Foreclosure Investors
Well hello there real estate investors and entrepreneurs.
I wanted to provide you with a checklist of “buy signals” that experienced pre-foreclosure investors. look for and find when evaluating an investment property. These are sure signs that you’re on your way to buying your next pre-foreclosure property at a substantial discount.
You don’t need to have all seven buy signals in place, but usually when you find one, the others are sure to follow.
Buy Signal #1: Homeowner Is Behind On The Mortgage Payment
This is an obvious one, but I thought it needed to be included in the list. Most homeowners who fall behind on the mortgage payment cannot catch up and usually lose the property at foreclosure auction.
When homeowners can’t afford to pay the mortgage, they cannot afford the others bills either.
Buy Signal #2: Grass Is Overgrown
After many years of running the streets as a pre-foreclosure investor, I learned to pick out (in an instant) the house in foreclosure as soon as I turned onto the street.
Overgrown grass is a sign of neglect.
Buy Signal #3: Windows Are Busted Out
Busted out windows are usually found in vacant or abandoned properties.
When homeowners in this situation move out, local kids sometimes vandalize the property by busting out the windows. This usually involves picking out the right target.
Buy Signal #4: Rotten And Exposed Wood
A house that has extensive rotten wood on the exterior has probably been neglected for many years. I’m always amazed at what people are willing to tolerate when it comes to sub-standard living conditons.
I once met with a seller who had a huge hole in the kitchen ceiling. The hole was huge – you could look up and see the blue sky above. I met with the seller for an extended period of time discussing the situation with the house.
Not one time did the homeowner say anything about the huge hole in the roof. This was a very strange exchange.
Buy Signal #5: No Garden Hose
I have found this one item in the list to be more telling than any of the others.
Without exception, the green garden hose told me if the targeted house was vacant or occupied.
If the green garden hose was still connected, the house was usually occupied. If the green garden hose was missing, in virtually every case, the house ended up being vacant.
Buy Signal #6: No Furniture
Usually when you suspect that a house is vacant, you peer into the nearest window to confirm your gut instinct.
When you see that the furniture is missing, you’ll know the seller has moved on to another place.
Buy Signal #7: Neighbors Haven’t Seen Them
Usually there will be a neighbor or two that can tell you something about the seller.
If the homeowner could not fix the problem with the mortgage, the neighbors usually knew all about it. They are sometimes a very good source of information