Foreclosure investors who had been carefully watching the housing boom at the turn of the century unfold may have been able to anticipate the current housing crisis. Along with the growing number of foreclosures has come a wealth of investment opportunities.
The number of defaults and indeed, foreclosures have been on the rise as sub-prime lenders have been going out of business. However, there is a lot more foreclosure investors out there than you may think.
Will You Be Able To Capitalize On This Foreclosure Boom? On the surface it seems easy enough. Get a list of properties in default. Contact homeowners. And get the deal done at a juicy discount, before the bank takes the house. Then you can fix it up and flip it, or keep it as a rental with an instant built-in equity profit. Right? Well, not quite.
You may be able to make a lot of money in foreclosure investing; enough to support yourself and your family, even pay for luxuries. However, foreclosure investments could also turn into a money pit which could take up all of your time and your money.
In fact, there are only a relatively small number of investors who have managed to make their foreclosure investing profitable on a consistent basis. Many investors make the mistake of not trying hard enough to set themselves apart from others in this very competitive market.
How Will You Differentiate Yourself in a Crowded Foreclosure Investing Field? To say it’s crowded is a huge understatement. The field of foreclosures is probably the most competitive area of real estate investing. It routinely gets more attention from mass media. So more people flock to pursue it.
Hundreds of investors in your metro area are mailing to homeowners facing foreclosure. They’re even harassing homeowners on the phone and knocking on doors.
In short, if a homeowner is behind on payments, you can be prepared for a major fight for his attention. Just imagine for a moment that person sitting at his kitchen table plowing through a pile of letters from lawyers, bill collectors and investors.
Your mailing piece is just one of many that goes straight to the garbage can. You must find a way to differentiate yourself from the investment crowds. Here’s an idea that will put you ahead of the competition.
The Only Ethical Way To Approach Foreclosure Investing. Truth be told, for most people who are behind on mortgage payments and in danger of losing their home – talking to a real estate investor about selling the home is the very last thing on their mind. They often perceive foreclosure investors as sharks taking advantage of their situation.
The way to get these homeowners to contact you is to offer them something none of the other investors are, the opportunity to remain in their homes.
Move For Advantage In Foreclosure Investing – Giving Homeowners the Option to Stay in Their Homes Instead of Buying It. For starters, giving homeowners a chance to stay in their homes is the ethical thing to do, plain and simple.
In addition to that, you can make a tidy profit by doing things ethically. You can try to assist the homeowner in negotiating a payment plan with their lender (through the lenders loss mitigation department) and charge a fee for this service.
You can get your hands on a nationwide list of contacts at loss mitigation departments easily enough. With so many homeowners struggling to keep their homes, there are tens of thousands of opportunities for you to make money by offering loss mitigation negotiation services.
To wrap it up, this approach to investing in foreclosures is the most profitable one to use. More often than not youll end up right where you started ” on your foreclosure investing track, as many homeowners will not get their repayment plan approved.
Once they realize that they really have no other option but to sell, they are most likely to sell to you, the educated and considerate foreclosure investor, since you have tried to work with them to keep their home.
By Andrew Watson