1. Do I need a lot of money? You need some money but not a lot. Money should not be the first consideration here. The deal is the important part. If you need more money to do a deal, call us. We may be able to help.
2. How can I learn more? It is difficult to get a straight answer. I had invested for years but I learned quite a lot more by calling the folks at County Records Research. They are happy to help out. In fact, not only do they hold a monthly (free) seminar for their foreclosure data customers, but they offer unlimited foreclosure buying consultation. They have answered many of my questions. You don't have to pay for an expensive seminar. You can learn this process as you go. ASK QUESTIONS!
3. What kind of properties are in foreclosure? The answer is EVERY TYPE imaginable. No neighborhood is immune. Some people get quite a shock when they learn some of their neighbors are actually in foreclosure. In fact, many of the homes currently on the market are in foreclosure.
4. Why is foreclosure data so important? It may seem overly simplistic, but nobody in foreclosure (or their brokers) are going to volunteer that they are in foreclosure. If you know they are, and how much they owe on their property, you will certainly adjust your offer. If they stand to loose their home and their credit, they are going to accept less. You stand to save a very considerable amount of money.
5. Can I get REO lists from banks? REO lists (real estate owned-by the bank) are normally free for the asking. Unfortunately, the astute investors who follow foreclosures know about the trustee sale outcome even before the banks do. In other words, the best deals are "done" long before the REO list comes out. The only sure way to be there first is to follow the property through the foreclosure process. Once the bank has assigned the property to a broker and begun the rehab process, there is very little savings potential left. They will want market price.
6. How about HUD and VA homes? There has been a lot of hype about these types of properties. In my opinion, they are not good deals. The government typically offers very attractive financing to obtain the highest price. Their brokers have to make a living too. These are not, generally, very good deals. I stay away from these.
7. How about property auctions? I used to frequent many of the home auctions. I found that most of the buyers were not particularly astute and had not done their homework. In many cases, the homes went for more than their market value. You would be better off with a good broker. That’s how good those auctions are. Your mileage may vary, however. If you are interested in auctions, Trustee Sales are where "The Rubber Meets The Road".
8. Can I compete with professionals? You most certainly can. Many folks are just looking for an upgrade in their home (or a first home). They actually have good advantages. You can get "owner occupied" financing and insurance and you don't have to wait months to turn the property. The professional needs a larger profit margin to cover months of rehab, sales activity, and other related expenses. You can do some of the work yourself. The small guy has an advantage there.
9. Are there legal complications? There are some. Fortunately for the individual, if you plan to occupy the property, you avoid many of them. I get most of the forms I use from County Records Research. They provide them free to their customers and will even help you them fill them out.
10. Isn't there too much competition? No! In fact, in doing the best deal I did last year, I learned that I was the only one who pursued the property. I guess everybody else thought there was too little equity. Actually, there was quite a lot and I did very well. On one of the properties I foreclosed on, I was only approached one time in four months by an investor looking for a deal. And there was a huge amount of equity in the property too. Pretty shabby don't you think?
11. Do I need expensive equipment? Well, a fax can help. They are getting pretty cheap. If you want to eliminate a bit of paper, a computer can help a lot, but you can get by without one for a while. Just take the foreclosure data by mail (hard copy). Anyway, after a few deals, you may want to eliminate some of the paper and a computer can certainly help a lot there.
12. Can the computer find equity for me? There I have been an active investor for many years. I wrote my own software to help track foreclosure properties. I am asked routinely if software can find equity in properties. My personal opinion is that it can't. I am constantly in contact with a large number of professional investors and I don't know even one that doesn't look through the data personally to find their deals. People do ask the question once in a while, though. Computers aren't magic. They don't think for you. Once you learn a bit more about the business and the data itself, you will most likely come to the same conclusion. Look around this website, I am going to post more info on this subject because it is very important.are some.
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