Finding Real Estate Pre-Foreclosures
You can search Lis Pendens at your local courthouse, Recorder or Registrar of Deeds office.
The investing window of opportunity opens the day the Lis Pendens is filed, Lis Pendens is the notice that a legal action is pending, The window closes the day the property is sold at auction.
The time between these two events enables an investor to work with the homeowner and lender to create a workout strategy or a purchase of the property from the homeowner before the sale date.
Evaluate Selections & Determine Potential
You know the default amount from the legal notices or service provider’s information. Now you must estimate the property’s market value. Subtract the default amount from the estimated market value to determine the gross equity in the property. This figure also reflects your gross profit potential. If there is little or no difference in the amount of debt and the market value, move on to another property. If there is a big difference, there may be enough equity in
the property to make a sizeable profit.
Contact the Homeowner
This is easier said then done. The homeowner is probably being bombarded with letters and calls from attorneys and bill collectors and has creditors showing up at his door. The only way to contact the homeowner is by phone, mail or in person, and chances are you will have a difficult time getting in touch with him.
Start with mailings. Indicate in your letter that you are a private investor looking for property in that part of town; Let the property owner know that you may be able to help him with his financial problems.
Demonstrating an understanding the homeowner’s dilemma will help your efforts. Indicate in your letter that you may be able to stop the foreclosure, save his credit rating and provide cash for use in paying his bills and/or for relocating.
Be professional and gracious in your correspondence. Invite the homeowner to call you at his convenience. If you don’t hear from him in a reasonable amount of time, say three or four weeks, follow up with another letter, perhaps worded a bit more urgently. As you get closer to the auction date you may want to send two or more letters per month.
Follow up with phone calls if you can. Be courteous, never pushy. Never interview the owner on the phone. Merely state that in order to determine whether or not you can help him, you will need to meet with him at the property. Make sure he understands that the meeting will be more productive and less time consuming if he will have the loan, mortgage and insurance documents available, as well as the foreclosure notices.
If you are going to make an offer on the property, you must have the loan, ownership, and debt or lien information. You must also assess the condition of the property and the property owner. Combined with the market value and the default amount, you have all the ingredients necessary to formulate your offer.
If you feel comfortable with it, you can visit the property in person. You may be confronted by an angry homeowner. Be polite and leave if you are asked to. Never, under any circumstance, snoop around, inspect or generally trespass unlawfully on somebody’s property.
Meeting the Homeowner
Use common sense and dress appropriately, something casual but not sloppy. Be sympathetic. Does the homeowner need cash? Is he waiting for a bailout? Will he go bankrupt? Find out. Review the loan and mortgage documents. Verify the loan amount, monthly payments, interest rates, taxes, etc. Review the insurance policies as well. Get all the pertinent information you can. Ask the owner if there are any other liens or judgments he may be aware of.
Inspect the property with the homeowner. Never comment on the owner’s lifestyle, just the physical condition of the property. Point out the obvious defects or items in need of major repair. Use an inspection checklist and record your information and estimated costs of repair.
Make no promises at this point. Make no offer or give the homeowner any money. Make an appointment to meet with him again if you think you want the property.
What has been your experience with foreclosurer services that claim to have local reps. who monitor the County Recorders offices to feed their databases? Are there any that are truly doing this? If so, which ones?
Wrinkles
I have not found one as of yet to be effective in my market areas. Since most counties are not online, I find it hard to believe they have folks doing the research in each area.
thank's for the reply, but what research area's do you think has proven to be most effective?
Wrinkles,
The sites that claim to have foreclosures for the entire country typically do not. They often rely on manual entry by auctioneers and realtors. If you're lucky, they'll actually input the information from local papers.
The trick to finding a good online source is to make sure that they specialize in your area. Even better, make sure their information isn’t just from the newspaper. The folks at ForeclosuresMass.com, for example, often get their information before the notices go in the paper. The notices aren’t available by any other electronic means, so they actually go, get the information and manually input it so that it is available on the website. As an investor, this kind of service is invaluable!
If you’re looking for other foreclosure data services, check out the Digital Deal site. They have a state-by-state list foreclosure data sources which should help you find something local.
Want the Best? this is it: RETRAN 1-323 290 7132 Ask for John the Big Boss, Tell him Lucius Foster sent you and you want all the goodies. NOD, Trustees Sales prior to and after. Then armed with the best, you now have to go out and dooooo it!!!!!Knock on the door, Mail the strange letter designed to be noticed, and opened, and non offensive, yet modivate the reader to action but not strong enough to have him or her or it. Commit suicide, it is so hard to work with the Public Administrators Office on those occasions.
As a former PsyWar Officer, yes that is what I did when I got too old to fly Fighters, you have to attack in multiples, yet at the same time not be too repetative cause if you do he opens one and throws all the others away. Sometimes you duplicate (almost) Official looking mail which looks like a postal follow thru on a Notice of Default. But motivates the receiver to call you as the path of least resistence. I could go on and on, but this civilian stuff is a lot easier cause they don't shoot at you, well not often. The means of contact are many. Right now I am trying to utilize a really modern times internet type solution I will let you know if I can work it out.
So knock on that door, hand him the newspaper never a mailer they will think you are trying to serve them. Its a thin and skinny line, But fun. Better then a movie Lucius
is there a resource that i can use to find the most recent pre - foreclosures in my area for free?
Go to your local registry of deeds.
how would i go about getting a good lease opt agreement?
John,
Thanks for the great information. I am in a dilemma. I have been looking for preforeclosures in my area of Missouri. The only notices I seem to be able to locate are listed in the legal newspapers, and by the time they are listed in these papers, you have approx. 3 weeks until sale. Can you recommend any information on how I may find these properties sooner? The courthouses don't seem to know what I am talking about. They say they don't have any NOD's or Lis Pendens. Your help is greatly appreciated.
Good information in SOME states. Not in California this is a Trust Deed State and the only foreclosures you would pick up on a Court House Lis Pens search are the very very few that have to go thru a Court for a Judicial Foreclosure. Mostly some idiot who is looking to go for other *****ets and thinks the property does not have enough value to cover. I *****ume such an individual never heard of Bankruptcy. Waste of Time. Go buy a service that does it for you. Cheeers Lucius