Entries Tagged 'Real Estate Short Sales' ↓

Investing in foreclosed homes is a very profitable business. Experienced foreclosure investors understand that contacting default mortgages before they turn into foreclosures is much more profitable than purchasing properties at auction. Actually finding and contacting default mortgages has historically been a difficult process but things have changed in recent years. Thanks to the internet, it is much easier to find the names of homeowners in pre-foreclosure than it has ever been.

Way back before this newfangled technology called the internet came around, an investor interested in finding default mortgages had to venture to the county court house. Once there you then had to sort through the lists of homes on microfiche and hopefully find a few of those pre-foreclosure deals. If you’re like me and don’t like spending hours in a courthouse looking at microfiche, you can try buying into a mortgage list that actually sends you default mortgage information as it is made available.

You can find mortgage lists online by performing a search for foreclosure forums. Once you have found a forum that interests you, make a post on that forum asking for information about mortgage lists. A forum member will inevitably be able to point you in the direction of a reasonably priced and reliable mortgage list. If you perform a search for a list on the search engines you will bring back results for about 100 different bogus lists. The best way to find a good mortgage list is to ask other foreclosure investors.

After you have your list of default mortgages you will then want to contact them using direct mail. Direct mail involves contacting your prospect with a specially written form letter. A good form letter needs to be written by a copywriting professional. If you don’t have a great deal of cash on hand, you might consider looking pre-formatted sales letters many of which are available online. Your form letters needs to be very clear and concise and explain the reason why you are contacting the homeowner.

Often times a homeowner may not be interested in your offer at first. Including a business card along with your letter is a very good idea if you can afford it. Don’t be discouraged if your mail outs have very low response rates. Studies have shown that a homeowner has to be contact seven times before actually responding to your sales message. In other words, it pays to follow up with your leads.

Nothing is sweeter than finding the perfect distressed property, in the perfect area, at the perfect price. Just one such property can easily earn you a years worth of investment income. Trouble is most real estate investors rarely ever find their ‘dream’ foreclosure. In fact, the average foreclosure investor will struggle to find a single, decent foreclosed property. It’s not because there aren’t foreclosed properties to go round, but rather because of the sheer number of people looking to invest in foreclosed properties. To make matters worse, investors have penetrated every phase of the foreclosure process.

This means that many savvy investors try to get a steal on a house before the house is made available to the general public. It is this point in the selection process where  short sale opportunities can be found. And most distressed homeowners will listen to you if you have a short sale plan that can help them avoid foreclosure. These homes are available in almost all areas of the country but investors have a tendency to only look for properties within their general area. Some foreclosure investors have simply forgotten that a profit made anywhere is still a profit. If you’re having trouble locating the perfect short sale candidate, it could be because you simply live in an area that isn’t very well suited to short sales.

The first market you should consider outside of your own should be the next closest metropolitan area near your home. Remember, different areas will likely have different demographics and market trends. Before looking into any other area, you should always be sure to have an exit strategy in mind. When it comes to foreclosed or almost-foreclosed homes, the best exit strategy is renting the property. In order to do this you need to evaluate the rental market of your chosen city.

If you like to travel and see new places, you might consider looking for distressed property in the country’s biggest foreclosure markets. Right now, Atlanta, Houston, and Denver have the hottest foreclosure markets anywhere in the United States. In fact, Atlanta has such a high rate of foreclosures that it is frequently shown on television as an example of the recent foreclosure boom. If you happen to have an internet connection you can easily find foreclosed properties in these areas to invest in.

All of the research you need to do to find distressed property can be done online. You can easily look at county and city records online at no cost. You can also find a Realtor to use as a partner by going to Realtor.com. To find out detailed information about market trends you can look at the websites of local real estate investors clubs. Every major metropolitan area has an investors club.

By expanding your base of operations beyond your usual boundaries you can dig up all kinds of sweet deals you may not have been able to find otherwise.

With the economy turning downward, and the sub-prime lending market collapsing, there are sure to be an increasing number of distressed properties in most areas. With many people unable to make their house payment, homeowners are going into default in record numbers. Many of these homeowners don’t know what to do, and don’t know how to find a way out of their situation.

Fortunately, there is a little knows technique that many real estate investors use to purchase properties called a short sale.

A short sale is a home transaction where the loan amount is worth more than the value of the property. The lender agrees to a purchase price that is lower than the outstanding balance of the loan. The lender regards the note as payment in full for the property.

Why would a lender agree to a short sale?

There are many reasons, but the main one is that a lender may feel that in the long run, it might be cheaper to accept less than the loan balance than it would to spend the money to initiate a foreclosure proceeding on the property. By the team the lender pays for the fees associated with a foreclosure, it may the cost the lender more money in court fees, attorneys, etc., than to accept a lower purchase price for the home.

Not only that, no lender wants to get stuck with owning property. The lender makes money by loaning money, and when a company’s money is tied up in assets like foreclosed properties, there is less money to loan.

In addition to making sense for the lender, the short sale also makes sense for the homeowner, as he is allowed to pay off the debt of the mortgage, and walk away from the sale without having to have been foreclosed on, thereby saving the owner’s credit rating. In many cases, the short sale can even save the homeowner from going into bankruptcy.

Last but not least, the short sale works for the investor because it allows him to purchase a home at below market value. Truly a win-win transaction for all concerned.

The “Short Sale Manifest” can give you all the information and forms you’ll need to be successful with real estate short sales.