To Invest Or Not To Invest

General Real Estate Investing
1

Hi all,

I am new to REI. I have been looking for a forum like this for a long time. I just found it this evening, and reading all the postings it looks like there are a whole bunch of people here to answer questions and give assistance.

I have good credit, a stable job, and money available to start my investing career, however I do not know how to go about it. I have read a whole bunch of books on the forclosure topic and how to invest in them, but none that I have read (or I fell asleep during that chapter) say how to find these properties. Some say go to a court house, some then say read the legal notices in the paper, and others say to place an ad in the newspaper.

Then some say to have a voice mail for people to call, some say to knock on the door, mail letters, make phone calls, etc… What is the best approach.

I have decided that I would like to attempt investing in pre-forclosures. What type of paper should I invest in? How do I get a line with just a voice mail?

Will someone please help me out with this?

Joe

2

Back up Joe and take a deep breath.

Foreclosure may or maynot be the best avenue. After reading the books you might try getting some street smarts. That means going to a real estate club in your area. Hang out, network with people that are doing it.

Learn different aspects of real estate investing to see what is best for you.

Most foreclosures don’t get that way overnight. They have deferred maintenance. That means rehabbing. Do you have those contacts?

All those approachs on how to find them work. Some more efficient than others. Keep learning.

3

As first timer, I would not recommend starting with foreclosures.
It’s too risky. Yes, you can make a lot of money - if you know what you’re doing - If you don’t, you can loose everything !

Start with something you are sure you can handle. Like for example, buying your first home for you to live in. If you have done this already. Well hell, you are half way done. Repeat this approcah with your first investment, buy your second home as if you are going to live in the house yourself. Then everything makes sense.

4

Hi Spaz,

To answer you question, most definitely invest. When it comes to investing its all about the numbers and not emotional attachment. If you see a house that doesn’t look all that great that doesn’t mean you shouldn’t buy it, because if you have a little bit of creativity you can do a little rehab work and walla you have a home that you would live in… ;D And since you’re looking at the pre-foreclosure/foreclosure nitch you’ll have to have an eye of creativity because by the time most homes get to the juncture of foreclosure they are in pretty bad shape… :slight_smile:

I must agree that becoming a member of a REI club in your area would definitely be beneficial to you. You may find others working in the same nitch or you may find that at this stage in your development as a REI foreclosures are a bit much to handle, which is totally understandable because they can be a pain…

But the bottom line is to study, ask questions and surround yourself around people with like minds who you can turn to.

Stay Focused…

5

Spaz,

I also agree that pre-foreclosures is probably not the best entry point to REI. That said, let’s look at the question you asked.

Your question is really what is the best marketing approach for pre-forclosure properties. There is not a single correct answer. All of the techniques you mentioned should probably be in your arsenal.

What works best in your market area is best answered by market testing. Send out postcards to a target market and measure your response. Put continuous ads in the newspaper and measure your response. Knock on doors for the notices of default filed at the courthouse, and measure your success rate.

Pick two or three marketing techniques that work for you, then refine them as your market dictates. For example, let’s say you have been running the same newspaper ad for several months, but suddenly the number of calls from your ad has dropped. Maybe your ad has gone stale and you just need to change the wording.

6

Joe,

you need a spanking!! Ha! If you have decided to invest in foreclosures and have not done the proper homework, and I’m geussing you haven’t judging by the questions you’re asking, then I don’t have much to say except…STUDY. Understand this, Knowledge is Power, Ignorance is Powerless. As for the best approach…Yes to all, my friend. I didn’t see one bad suggestion. Who says you can only use one or two? Leave no stone un-turned! Use them all to find the properties that are, and this is important, best suited for you and your intentions.

As for the telephone line, call the telephone company and tell them what you want!!!

7

Hi Joe,

I will say the investing in pre foreclosures can be a daunting process, I will disagree with one not starting out investing in pre foreclosure, as this is the most lucrative area of real estate investing.

[]Foreclosure Investing Can Be A Wonderful Source Of Profit & Bargains!
[]Over 1 Million People Face Foreclosure in The United States Every Day!
[*]1,000’s Of County, State And Government Auctions Are Held Daily!

The numbers are staggering! Foreclosures are a nationwide epidemic! In some areas of the country, you will see more foreclosures than others.

You will be able to locate great deals for profit by:

Flipping
Wholesaling
Holding
Renting
Lease Optioning

As a professional investor, you need to learn to actively research bargain-foreclosed properties during:

The Pre-Foreclosure Process
The Foreclosure Sale (Auction, Sheriff, Or Trustee Sale)
The Real Estate Owned Process (REO)

You also need to learn how to farm out foreclosure leads before they get to legal publication.

Farming foreclosure leads is a simple process of:

Locating Fertile ground (Researching your most profitable area)
Tilling and planting seed (Marketing your foreclosure campaign)
Harvesting (This is where your profit comes from)

The secret to foreclosure investing is simply knowing how and where to locate them. It can be difficult to locate and execute the purchase if you do not know what to do!

The Foreclosure market is a little understood or worked market.

Minimum information is available to the uninformed public.
Sellers are motivated.

Most people do not understand the process.

Some properties can be purchased for little of your own money.

Banks do not want property back or want to dispose of property as soon as possible.

Now that you are ready to purchase a foreclosure with checkbook in hand let us, first give you some advise that we have learned from the hard streets of being a real estate investor:

Make sure you understand what foreclosure investing is all about!

If you have a partner, make sure your partner understand what foreclosure investing is all about!

Continue your education in foreclosure investing.

Talk to other foreclosure investors, real estate agents and auctioneers who do this on a daily basis as many would be happy to educate you in the world of foreclosure properties in your market area.

Visit the library or bookstore for guides by reputable authors who know foreclosure investing in’s and out’s.

Be realistic.

Not all foreclosures are good deals.
Not all foreclosed properties are available at discount.
Repairs might be far more than you expect.
Not all tenants pay rent on time – or at all.
Some renters damage property.
It may not be possible to re-sell the property in a timely fashion.
Not every deal yields a profit.
If you have a profit, you may face taxes.

If you only look at foreclosures, you may miss other investment opportunities.

The list of potential downers can go on … and on …

Think of it this way:

If making money with foreclosures were both easy and a sure bet every time, no one would bother with other forms of investing or even a job

Get professional help from brokers, lenders, attorneys, accountants, home inspectors, and others.

Foreclosure properties are not about to disappear.

The mortgage industry is reporting that delinquencies on mortgage payments are up.

You will be seeing more foreclosures on the market.

One can not teach you the process with just a few forum posts.

You need to join a local REI club in your area and try to find a mentor or coach that is willing to walk you through this process.