It is commonly understood that Investing in Real Estate can be financially lucrative BUT it also offers wonderful assistance to the Seller who is about to go into Foreclosure. A RULE of thumb that Marko lives by is – “If I’m not HELPING the Seller – I WON’T do the deal”. In other words – if offering to take the property off the hands of the Seller helps them save their credit, avoid stress, and at the end of the day, hopefully save them equity – Then by all means – OFFER THEM THE HELP. If not, walk away…
BUT it is IMPORTANT to clearly understand that if you don’t help yourself first, you can’t help others…
Therefore, the foundation of your efforts needs to be in obtaining and intelligently analyzing “THE LIST”. You can gather your list of motivated Sellers in many different ways – door to door, telemarketing, direct mail, court house searches, purchasing lists from other investors, in all comes down to gathering or obtaining “THE LIST” of those people in default where their lender has started the foreclosure process. REMEMBER these people desperately NEED YOUR HELP, so get “THE LIST” and get ready to help them.
IMPORTANT – Preparing / Analyzing your LIST is almost as important as gathering your LIST. Once you do then you will analyze your marketing tactics to determine the most profitable and efficient plan to follow. Part of analyzing your LIST is to watch and keep it as current as possible. Also remember to filter your lists by choosing different criteria, such as price range, ZIP codes of interest, year built (sometimes), type of property (only single-family homes), loan origination date, loan amount, etc. Profit Grabber is an automated way of doing this for you – CHECK IT OUT!
Short Foreclosure Turnaround
Making sure that you have the most current list possible is essential. Especially if you live in an area with a quick foreclosure turnaround time – if you don’t stay on top of your LIST, keeping it up-to-date and “Fresh” (1 to 2 days old) your competition will and will leave you in their dust.
Homeowners who only have a few weeks before Foreclosure, make decisions quickly; And because of that they will react quickly. The first to reach them is often the last to reach them. If you are the one to establish a relationship with them first, you will leave your competitors in the “dust”; So as NOT to lose their home all together, these homeowners will make decisions immediately, and will become “blind” to other marketing.
Some investors get daily recordings and knock on every door the very next day. Rejection is plentiful but so are the deals! You may have a different strategy, but this shows the importance of getting there first in those quick process states.
Longer Foreclosure Turnaround
If you live in a state where the foreclosure process is longer – 3, 6, or even 9 months – the Seller going into foreclosure sometimes has more options, more hope and some will choose to take a “wait and see” attitude. But soon the truth will sink in – in this situation you may want to keep a list a bit older but only to about a week unless you have no other choice.
Your marketing strategy in the short process states, being first is important, but if foreclosure lasts 6 months, you will want to send out mailings over many months. But even in these longer processing states, being first will still have its benefits. Once the foreclosure notice is public, your competition will be contacting them too. The Seller may become overwhelmed, and then your job becomes much harder. So, get to a potential Seller as soon as possible, show compassion and a willingness to help.
Also REMEMBER – if you contact the Seller first – they may not even know that the foreclosure has been filed. It is best to not be the “bearer of bad news” but if done appropriately, and with the thought in mind that you are there to “solve a problem for these people”, you can end up being the saving grace and peace of mind for them.
If you are in a longer process state, MULTIPLE Mailings are essential. Remember that Sellers that are recently put into foreclosure like to “stick their heads in the sand” and forget. In these cases, in the first month, they will be bombarded with tons of marketing pieces but then in the following months, much less. The initial bombardment of “Foreclosure” mailings will also force reality onto the Seller and in the following months, they will be more likely ready to deal with it. This is a great time to let them know, with a call or mailing, that you are there to work with them, to help them get through this with less stress. AKA – to buy their property before they ONLY have one way out, FORECLOSURE and BAD CREDIT – YUCK!
NOTE – Consider this – if a Seller has only been in a home for a year or less, the emotional attachment is less daunting, but if it has been 10 or more years, the emotions involved will be strong. Also – sometimes homeowners go into Foreclosure and then get out somehow BUT then fall back in. Many investors do not think of this and therefore these people rarely get contacted and are excellent sources for your LIST.