• What Makes Pre-Foreclosure Investing A Dominant Approach To Buying Houses

    Date: 2010.02.01 | Category: Uncategorized | Tags: ,,,,

    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 abuse

    Homeowners 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.