Spot A Foreclosure Early

With the continuing evolution (or devolution) of the sub-prime mortgage crisis, more investors are rushing to find the latest foreclosure to hit the market. For those who can secure good credit or have money to spend, the opportunity to acquire investment properties for pennies on the dollar is unprecedented in modern memory. These days, the trick is in identifying a potential foreclosure early and get your offer in before the feeding frenzy begins.

Luckily for you, we have a few good ideas about how to do that.

1. Subscribe to a free locator service. Our own Empowered Investor Network costs nothing and includes our regular recommendations on newly available property’s headed for foreclosure from around the country. As an income property investor, you greatly increase your odds for success if you diversify your holdings into different geographical areas.

2. Paid locator services. If you absolutely can’t tolerate the thought of a free service that’s just as good as a paid one, you might want to check out www.propertyshark.com and www.foreclosures.com. Both include a free trial period that allows you to judge whether or not you want to sign up for the monthly subscription fee.

3. Negotiate with the seller before the public auction. Regular income property investors are wasting their time going to most public auctions. Big banks and other lenders control the ebb and flow of these “open” processes. Use one of the services we’ve mentioned to find out which properties are headed for foreclosure. You have a small window of opportunity, so move fast.

Your best bet to strike a deal before a property hits the public auction is to call the owner directly and see if you can agree on suitable terms. Sometimes it’s hard to get past his attorney, so you might have to physically visit the property and try to talk to the owner face-to-face. The attorney is not being disingenuous, there’s simply no benefit to him to strike a deal before it moves to auction.

If the owner is hesitant to acquiesce, consider making him your partner. Offer to bring the mortgage payments which are in arrears up to current status. This solves his pressing problem. After that, put the home on the market and, after it sells, cut him a check for a portion of the profit, perhaps 10% or 20% when all is said and done.

Got it? Now go get a foreclosure.

The Creating Wealth Team

Creating Wealth Show logo 2015