| If you were a real estate investor watching
the real estate boom of early 2000s closely, you could have predicted the foreclosure
investing opportunities that would become available today in virtually every real estate
market in the country.
In the last two years mortgage lenders have been reporting
dramatic increases in defaults and foreclosure rates nationwide causing many sub-prime
lenders to go under. But that's just a tip of the iceberg.
Will You Be Able To Capitalize On This Foreclosure Boom?
On the surface it seems easy enough. Get a list of
properties in default. Contact homeowners. And get the deal done at a juicy discount,
before the bank takes the house. Then you can fix it up and flip it, or keep it as a
rental with an instant built-in equity profit. Right?
Well, not quite.
Getting into the foreclosure investing game could be an
extremely lucrative move that alone could not only feed your family but pay for lavish
lifestyle and vacations. Or it could turn into a big black hole consuming all of your
time, energy and marketing dollars.
Very few real estate investors actually succeed in
foreclosures on a consistent basis. Why? Because, they're using the wrong approach in a
very crowded market.
How Will You Differentiate Yourself in a Crowded
Foreclosure Investing Field?
To say it's crowded is a huge understatement. The field of
foreclosures is probably the most competitive area of real estate investing. It routinely
gets more attention from mass media. So more people flock to pursue it. Hundreds of
investors in your metro area are mailing to homeowners facing foreclosure. They're even
harassing homeowners on the phone and knocking on doors.
In short, if a homeowner is behind on payments, you can be
prepared for a major fight for his attention. Just imagine for a moment that person
sitting at his kitchen table plowing through a pile of letters from lawyers, bill
collectors and investors.
Your mailing piece is just one of many that goes straight
to the garbage can. You must find a way to differentiate yourself from the investment
crowds. Here's an idea that will put you ahead of the competition.
The Only Ethical Way To Approach Foreclosure Investing
Truth be told, for most people who are behind on mortgage
payments and in danger of losing their home - talking to a real estate investor about
selling the home is the very last thing on their mind. They often perceive foreclosure
investors as sharks taking advantage of their situation.
So, if you want your phone to ring with people in
foreclosure, contact them with an offer to 'keep the home'.
Here are 3 Reasons Why You Should Offer Homeowners Facing
Foreclosure the Chance to Keep Their Home, Even if You're Really Interested in Buying it
- First, trying to help a family in financial trouble is the
ethical thing to do. You'll be preserving the American Dream.
- Second, you'll actually make money doing it. You can help
them negotiate a repayment plan with their current lender (the process is called Loss
Mitigation) and collect a fee for your service. There're several companies nationwide with
an in-house list of Loss Mitigation department contacts for literally every lender in the
country that will do all the work for you. So, even if you never buy a single home, with
tens of thousands of foreclosures in your hometown, offering Loss Mitigation services
could turn into a lucrative income stream by itself.
- Third, this is the most profitable approach. In many cases
you will end up buying the home. Remember, the Loss Mitigation process will only work for
those owners who got behind, but now recovered their ability to pay. Most won't qualify
for a repayment plan because they can't prove their hardship is behind them. And they
won't know it until you helped them to pencil their income and expenses on paper and
submit it to their lender. Now they have undeniable proof they can't keep it. Once the
reality settles in, they'll start talking 'sale'. Who will they sell to? You, of course.
You have now earned their trust and it's the only next natural step to take.
So again I ask you: Will you be able to capitalize on the
booming foreclosure market? If you follow my advice, you will be able to profit from
foreclosures for the next 5 years or even longer. |
