It may sound a bit harsh, but you can benefit from other people’s misfortune. In fact, large profits from the real estate market results from taking advantage of opportunities such as foreclosures, where investors find great deals on houses that have been reclaimed by the lenders. Such properties are usually sold at prices well under their market value because the owners are desperate to unload them.
However, the cheap prices also come with key potential downsides: some of the properties have mortgages associated with them or liens against them, which may have to be inherited by the new owner. It’s also generally difficult or at times impossible to inspect the property in advance of the sale, meaning there’s no time to check if the fixtures and electronics still work or if the basement is flooded.
As such, investors need to approach these properties proactively, and be willing to take on these risks. Sounds good? Good. Now, the first major challenge you’re likely to face is locating these incredible bargains. Here are a few tips to find properties in foreclosure.
- Keep Close Contact with Likeminded Investors
Working with others in real estate can be really beneficial to your business, now and in the future. Likeminded investors are a great resource for most of the things you’ll need in the business. Their knowledge about a given area can be invaluable when locating a property for sale. Aside from the knowledge, they may also have an inventory of properties waiting to be sold, as well as a buyer’s list.
Check out the local real estate investor clubs
The local real estate investors meetings are some of the best places to starts, as it’s quite easy to find them online. Simply perform a search, find a club near you, and see what you need to do to attend it. Although most individual clubs tend to specialize in specific niches, they are quite invaluable for local information. Before you attend the first meeting, contact the leader and let them know what you’re looking for. They’ll most likely introduce you to several investors that have a working knowledge of the area, and some might even be willing to add you on their buyer’s list.
Check out other local websites
While searching online for the clubs, be sure to see if there are any other real estate websites that catch your eye and contact the individual or company who published the content. One of the renown websites for this is Craigslist, which is a popular choice for many investors as well as http://foreclosuresdaily.com/.
Ask an Agent
Most investors are not real estate agents, but they do work closely with them. a good relationship with an agent can be beneficial, especially in lieu of a referral. Referrals are actually a major source of leads, since they are more likely to end up in closed deals. With the right connections, you can be easily introduced to a house that’s perfects for you and build instant credibility and another relationship in the process.
- Search Through Public Records
In the different stages of the foreclosure process, notices are usually recorded with the County Clerk, who resides at the County Recorder’s Office. The information is regarded as public record, meaning it’s available to just about anyone. Just pay your county’s office a visit and search for a Notice of Default, Notice of Sale, or a Lis Pendens. The good thing about searching the public records yourself is that it’s free of charge. Additionally, you are more likely to come across newly posted properties that are yet to reach most of the online foreclosure data providers.
Newspapers also provide foreclosed property listings earlier than many other providers do, since the properties are not foreclosed upon yet. However, the scheduled auctions and sales can be cancelled in case the homeowner pays the deficit on the mortgage before the foreclosure actually occurs. Plus, some states allow the homeowner to get their house back even after it’s sold at an auction through the Right of Redemption Before Foreclosure.
Many notices in the public records are for properties that are still in the pre-foreclosure, and you need to confirm the status of these properties often, or otherwise contact the homeowner directly to enquire about purchasing the home before it’s foreclosed on.
- Check Up Online Records
Compared to going physically to the Clerk or Recorder’s Office, an online search is a bit easier and perhaps more convenient. However, most of the time, you certainly won’t be the first person to find out about a pending bank foreclosure.
In many cases, you’ll need to use an online listing service, where you might have to part with a weekly fee or participate in a free trial to access their listings. It’s recommended that you first check out the free trial offers to gauge which provider suits you best. Further, there are both regional and national foreclosure listing services, which provide ample data on the properties in various stages of the foreclosure process. Many of these providers will include information such as address, name, loans owed, as well as additional loans outstanding. Few will even provide contact phone numbers.
Individual bank websites are also great resources. These feature detailed listings of Real Estate Owned properties (REO). These properties might also be listed with a real estate broker who’s charged with handling the sale. Some of the banks’ websites to check with include Well-Fargo, Bank of America, Citibank, JP Morgan Chase & Co., SunTrust Bank, US Bancorp, etc.
- Physically Checking Neighborhoods
If you are aware of the neighborhoods you’re targeting to invest in, or live nearby, it’s still a viable option to explore them in person. You’ll likely come across some real estate signs in the yards for homes in foreclosure, and even some in pre-foreclosure. The signs indicate which stages of foreclosure the property is in, and who you can contact for more information.
- Find Asset Managers
It’s also possible to find an REO property via the Asset Management Companies. In simple terms, these are the companies that help the lenders to dispose of certain assets. Most of these asset management companies offer listings of the properties that they represent on their website.