Investing in Foreclosures

Lessons Learned

2007-04-12T15:40:00.000-07:00

For those of you out there doing short sales, here's a very important lesson (one which I was unfortunately reminded of today). This may be a bit beyond the scope of some beginners, but it's a good learning point anyway.

When you're working a short sale, MAKE SURE YOU ARE THE POINT OF CONTACT FOR THE BANK'S BPO AGENT (and be sure the homeowner understands this)! Here's what happened. I've been working on a particular short sale for about 1 month. I had submitted all necessary paperwork to the bank and was waiting to get the BPO (Broker's Price Opinion, basically an appraisal for the bank) set up. Well, over a week went past and I hadn't heard from the bank, so I called them up today. I was surprised to learn that they said they had tried contacting me several times (even though they never left a message), so they contacted the homeowner, who agreed to give them access to the property.

Now why is this important? Primarily because when you're working a short sale, you want to be present yourself to hopefully influence the BPO. You do this by pointing out items that need repair and providing the appraiser with area comps (preferably low ones that support the offer you're making to the bank). The lower that BPO appraisal comes back at, the easier your job will be in negotiating an attractive price.

I have not yet been able to find out if the BPO has been completed - couldn't reach the homeowner, and the bank won't have any info. on it until a week after they get the report (good old bank bureaucracy) - so I don't know how severe my mistake was. But, here's the lesson. Even though I made myself the point of contact with the bank, I should have done a better job explaining to the homeowner that I need to handle all communication with the bank about the short sale. I'm just hoping the BPO hasn't been done yet.

More Investing Articles

2007-04-10T11:21:00.000-07:00

Buying Pre-Foreclosures - Homeowner Relations

Purchasing distressed properties during the pre-foreclosure phase of legal action is a great
idea for real estate investors. During this time, you can work directly with the homeowner
and this saves you a great deal of headaches, hassles, and legal red tape. This is the only
time during the foreclosure process that you can inspect the property freely, make an offer,
and close the deal much like you would in a traditional real estate transaction. But unlike
a traditional sale, buying pre-foreclosures allows you to purchase property significantly
under value.
Once you have located a good property investment that is being foreclosed upon, you will
need to contact the homeowner to begin negotiations. This is the toughest part of buying
pre-foreclosures because emotions are very high at this point in the homeowner’s life. Your
first contact should be made delicately with the homeowner’s vulnerable position forefront
in your mind. Keep in mind that he is likely besieged by phone calls from creditors and will
likely view you with more than a little skepticism.
Since the homeowner is likely screening his calls, you might find it difficult to get in
touch with him. You could start the buying pre-foreclosures process by contacting the
homeowner by mail. Letters are less threatening, and if they are worded the right way may
get you an appointment with the homeowner.
Follow these letter-writing guidelines for buying pre-foreclosures:
• Make sure the envelope is nicely hand written so it looks personal and not like another
bill collector. Letters that are too professional looking may also be a turn off. If you
want the stressed-out homeowner to even open your letter, it must look non-threatening.• Word your letter in a friendly way that makes the homeowner feel like you are trying to
help him. Outline exactly what you can do for the homeowner. When buying pre-foreclosures it
is common for the investor to pay off the loan and give the homeowner a little cash to pay
off some other bills. • Give the homeowner a way to contact you at his convenience. Never threaten or pressure. If
your letters get no response, simply increase your efforts by sending more letters, but no
more than two per month. A couple of phone calls might also do the trick, but only begin
these as follow up to mail correspondence.
Once you have made contact with the homeowner, continue to be sensitive to the homeowner’s
position. When buying pre-foreclosures you should never judge or treat the homeowner in a
condescending manner.
A more effective strategy is to meet with the homeowner face-to-face. While this sounds
daunting, it is by far the best way to close the most deals. Learn how to approach the
homeowner during this time, and how to get them to work with you, and you will get far more
deals.
About the Author: Chris Thomas is a real estate investor and author of the best selling
ebook "Dominate Preforeclosures," which teaches you how to acquire property in
pre-foreclosure with a successful, proven way to approach homeowners and get the deal. Learn
the strategies that the top investors use daily, but refuse to share by visiting
http://www.dominatepreforeclosures.com
Article Source: http://EzineArticles.com/?expert=Christopher_P_Thomas

Finding Good Foreclosure List Can Make The Difference

Every year thousands of properties fall into foreclosure. Although this usually means an
unfortunate end for one person it can be a gold mine for another. If you find some good
foreclosure list you can make a very handsome living. This article will help you wade
through the interesting world of foreclosure list and investing.
You see companies offering foreclosure seminars on TV all the time these days. Hardly a day
goes by when I cannot turn on my television and see advertisements for foreclosure investing
seminars that are conveniently coming to my area to teach me how to profit with foreclosure
properties. I am sure you know exactly what I am talking about.
These seminars are not always bad, if you know how to stay away from all the hype. You must
understand that these highly trained professionals will claim to have access to all the best
foreclosure list and best methods for finding golden properties. They just might have some
good resources available to you. Although, many of their techniques and methods may be
viable you still need to do some of your own homework in finding the best foreclosure list.
You must also be aware that they are there to sell you into their program.
Foreclosure list are easy to find, but they are not all good. The best way to get well
educated on foreclosure list is to work with an experienced realtor. You may need to buy a
few lunches and spend some diligent time seeking the right realtor to work with, but they
are out there. The person who is truly qualified to find a good foreclosure list can help
you find the best foreclosure list for your needs.
If you can find some free list that only cost you a few minutes to fill out your name and
email those might be worth checking out. Often time’s people assume that everyone has the
same foreclosure list. You may be right, but it is also true that less than 10 percent of
the people who have access this free foreclosure list will ever use them.
If you need more foreclosure help then quickly head over to http://foreclosure-help-now.com
where you will find helpful foreclosure tips, advice and resources including information on
foreclosure plans, negotiating and more Foreclosure List.
Article Source: http://EzineArticles.com/?expert=Tom_Turner

Good Investing Article

2007-04-10T11:11:00.000-07:00

Find Out How You Can Make A Profit With Foreclosures

Can you believe how the real estate market has grown in the past five years. New homes are
popping up everywhere. Almost any free land available is being turned into lots ready to
build homes or place manufactured homes on. Foreclosures are becoming more and more
plentiful everyday. With interest rates at all time lows in the past few years, many people
who could never afford to buy a home are doing so. With just a little bit of good credit,
you can purchase a home with a very reasonable interest rate and affordable mortgage
payment. This article will give you some tips on how you can make a profit buying
foreclosures.
You might be wondering what foreclosures are. Basically, a foreclosure is a home that has
been financed and then for whatever reason, the payments were not kept up, which forced the
mortgage company to take possession of it. Many people buy a home with the intent of living
in it for the rest of their lives, but unfortunately, sometimes things just happen, and
maybe they got injured or received some permanent damage and couldn't work any longer. Maybe
they got laid off from a job they thought was a secure job or you got sick and are
permanently disabled. For whatever reason, they didn't intentionally buy their home just to
live in it for awhile and then plan to lose it in foreclosures.
Foreclosures can often be good buys and as sad as it is, someone’s loss can be your gain.
The mortgage companies have many expenses involved in foreclosures. They are not only losing
the monthly mortgage payments, but they are also responsible for any taxes owed on the home.
The home might not have been cared for properly and in order to sell the home, there may be
some fixing up to do which will cost money. Many foreclosures are bought at below market
value because of these things. They are set up for a quick sale as everyday the home is not
sold is costing the mortgage company money. Foreclosures can quickly build equity depending
on how much you have to pay for the home.
There are millions of foreclosures on the market, and I do mean millions. You can buy a
foreclosure home at a reduced rate, fix it up, and turn around and resell it for market
value and begin making a profit. In order to avoid paying too much taxes on capital gains,
you can buy foreclosures and rent them out for a time, and then resell them. Most renters
pay enough to make the mortgage payments for you so you are covered and won't have money out
of pocket expenses. There are many ways you can turn foreclosures into profit and invest in
your future.
If you need more foreclosure help then quickly head over to http://foreclosure-help-now.com
where you will find helpful foreclosure tips, advice and resources including information on
foreclosure plans, negotiating and more Foreclosures.
Article Source: http://EzineArticles.com/?expert=Tom_Turner

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2007-04-10T11:09:00.000-07:00

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