Summary of what we have learned
- Selecting a purchase
Finding a good foreclosure
property to purchase isn't a matter of deciding what you want to buy,
where and when. An investor must select a property from what is available,
and buy at just the right moment.
- The time to buy
The best win-window is
the time between the beginning of the foreclosure process and the forced
sale at public auction. There is ample time, six months to a year, to
research the property, contact the owner, conduct inspections and negotiate
with both the lender and the owner for a win-win-win.
- Keeping track
When you learn of a property
in foreclosure that meets your investment criteria you should begin tracking
it at every step and watch for opportunity. As situations change
so will attitudes. A smart investor will be waiting and watching with
problem solving ideas.
- Buying at auction
The opportunity for the
biggest rewards carry the highest risk. We have learned that buying foreclosures
at the auction is the only step out of the three - before, during and
after the sale - that requires a substantial amount of risk capital
and high level of expertise.
- Things aren't what they used to be
-
The
foreclosure investing business is not what it was several years ago.
When the economy improved, very low down payment mortgages became widely
available. Now, with any economic slowdown, foreclosure of marginal
loans goes up quickly.
Although inventories of bank owned and government
owned properties are going up, there is little equity available for pre-foreclosure
purchase and the loan judgment amount is higher that most investors will bid
at auction.
Unfortunately for you and me, the banks no longer just
give the properties away either. Bank owned opportunities were abundant in the
past, but today lenders make a real effort to sell their properties at market
value.
- There are new foreclosure opportunities today
- Opportunities
will always be available for investors who are willing to solve problems
for property owners and lenders in exchange for a chance to make a
profit. The amount of profit will likely depend on your knowledge,
imagination and perseverance.
- Fast Facts:
- There is no law requiring a lender to make mortgage foreclosure information available to anyone.
- It is unlikely that you can call
a bank for foreclosure information and get anyone to even talk to
you. So many uniformed buyers called banks in an attempt to buy properties
for half their value that banks do not want to be bothered. People
who do not understand the process and make absurd offers just waste
everyone's time.
- Foreclosure lawsuits and the transfer
of real property are always recorded in the county courthouse where
the property is located. That makes it public information.
- There is no national information
source for private lender REOs. The painstaking accumulation and
recording of each county's foreclosure data is still a daunting and
largely imperfect task.
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