The key to success in investing in real estate foreclosures is figuring out how to find these opportunities before anyone else does. The best way to do this is to locate them when they are in what I like to call pre, pre foreclosure. As a group these are the best real estate leads that you could hope to find. You, I, and the rest of the world, know that there is a tremendous opportunity in real estate investment. The percentage of profit that can be made in the current market is greater than it has ever been. There are more homes in foreclosure or will be in the immediate future than at any time since the great depression. What that means to the investor is that lenders are more readily agreeable and are very willing to enter into negotiations about discounting the loans. They are under extreme pressure to reduce the number of bad loans that are on their books. That creates the opportunity for buying for pennies on the dollar.
Here is the outline that I have found to achieve the greatest profits with the least amount of effort. The way to find the best leads is not to look for them but to create a situation where they come to you. How to do this is to learn the process of loss mitigation. This is where one negotiates with the lender on behalf of the homeowner in order to attempt to reach a settlement where they are able to save their home. This is the key to finding the best deals. This allows you to advertise as someone who is able to help them. And you will be able to help a good percentage of your clients and they will pay you very well for this service. But not everyone will qualify to reach a settlement and at that point you are in the driver’s seat to take advantage of the opportunity.
First, the homeowner will know that there is no way out but to choose how they want to exit the property. The two options that are available to them are continuing on with the foreclosure process and wait until eviction or by finding someone to buy their home thus preserving their credit. You are already in their circle as a trusted ally and already have a relationship with the lenders involved. This creates the smoothest and simplest foreclosure and short sale that a real estate investor could ever dream. No competition from other investors. No bidding wars driving the profits down. Best of all, they called you and paid you for the opportunity to make a huge profit on the property. It feels like the money just fell in your lap.