What Makes Pre-Foreclosure Investing A Dominant Approach To Buying Houses
How do you know what real estate investing approach is best suited for you?Several years ago, we learned just how powerful foreclosure investing could be. If you had to try and explain foreclosure investing, you could throw a wide net over everything from a homeowner missing their first mortgage payment all the way to the foreclosure property selling at the courthouse steps.
Then came along the idea of pre-foreclosure investing.Pre-foreclosure begins when a notice of default is filed at the local courthouse and concludes when the house is auctioned off at the Sheriff sale.
Reason 1 – Sellers Have A Very Compelling Reason To Sell
I don’t know why homeowners who fall into pre-foreclosure do the same thing every time, but they do. In virtually every case, when you see this situation develop, the homeowner is usually going to fail to make a mortgage payment and the property falls into foreclosure.
When a seller falls into pre-foreclosure, its very difficult for them to climb back out.
The leading factors that cause someone to fall into pre-foreclosure are:
1. Divorce
2. Job loss
3. Prolonged sickness or disease
4. Employment transfer
5. Drug and/or alcohol dependency
Sellers in pre-foreclosure must sell the house in order to avoid having the Sheriff sell the house at the auction. Experienced foreclosure investors know that when they help sellers first, they are then rewarded with these steeply discounted investment properties.
Reason #2 – Less Competition For The Experienced Real Estate Investor
Many who consider themselves real estate investors are not trained properly when it comes to searching out and identifying the most profitable investment properties.These investors focus exclusively on classified ads and buy investment property at retail prices. Some of these investors may work with a real estate agent and attempt to find invesment property – but these are still listed properites with retail prices.
You can never really get ahead in the real estate investing business if you’re paying retail for investment property.You must learn how to buy investment property at wholesale prices.
Experienced pre-foreclosure investors don’t work with real estate agents and certainly don’t pay retail prices for investment property.These investors are well trained in locating the best real estate deals in town.Pre-foreclosure investors don’t wait around for something to happen – they go out and meet these sellers.
Some pre-foreclosure investors take the time to mail out post cards and make a few phone calls to sellers in pre-foreclosure. But I have found that the most effective way to target pre-foreclosures is by traveling out to each property and physically knocking on the door and discussing the situation with the homeowner.
What’s great about this approach is that it offers the higest return on investment with the least compeition.Very good combination if your trying to build generational wealth.
