Investor Training

Table of Contents

Some General Advice for the curious investor.  See the helpful introductory information below.

Introduction

If you are looking to purchase a home, foreclosed properties and bank repossessions offer several opportunities.  The difficult part is in finding them before everyone else.  Who isn't looking for a good deal on a home?  Your not the first person to "discover" foreclosures, just turn on any late night TV station and there are several experts telling you how to get rich in real estate.  Just shell out $98.98 and they'll make you rich! Right!  Thankfully, they're wrong!  If they were right then there would be no opportunities remaining for you today.  The truth is that foreclosure investing is a business that requires hard work.  But hard work at the time of your choosing and hard work that leads to profits that are the fruit of your labor.  Break free of the "rat race" and find financial freedom by turning your hard work into your personal wealth.  How often does that happen in the corporate world?

Some Foreclosure Background
In the state of Georgia, the lending laws greatly favor the banks in taking a property back by non-judicial foreclosure.  There are several important steps in this process and opportunities to purchase these homes exist at each step.  There is no one answer that fits all, but be advised  that there are companies who have been investing in foreclosed real estate for years, well funded, and well educated.  They know more about the process of foreclosures than most Attorneys, and are backed with hard cash.  These companies, will win the obvious good deals, it's their job, and they do it well.  The best strategy for the independent investor is to find the "diamonds in the rough", the properties that are not obvious on paper.  These properties are best discovered by...

  • Specializing in one physical region (one county)
  • Learn the property values and the value trends in your region
  • Visit all of the investment properties!  The greatest deals are not obvious on paper!
  • Get good quality pre-foreclosure data from an experienced source.  That's our specialty!
  • Work Hard and Earn.

If you are willing to work hard while investing in real estate foreclosures, then this business may be right for you.  Take a look at the opportunities available in each of the following foreclosure steps, and see where you best fit.

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Preforeclosure

This is the stage of the foreclosure process that the TV Ads tend to focus on.  All homes going into foreclosure must be advertised in the public newspaper for 4 weeks prior to the foreclosure auction.  During this period before the foreclosure auction, the home owner, typically the mortgagor, still owns that property.  On the day of the auction, the mortgagor loses possession of the property.  Herein lies the window of opportunity for investors to benefit in the pre-foreclosure stage.  The goal is to buy the property before the foreclosure auction.  Actually, the goal is to satisfy the lender, the mortgagee, prior to the auction.  I say this because the investor can either purchase the property or attempt to take over payments from the owner.  Here you are actually doing the owner a service by helping them avoid a huge scare on their credit.

The typical process for investors at this stage is to first find the pre-foreclosure properties, contact the owner, and then offer to rescue them from the foreclosure process.   Finding the pre-foreclosure properties is where our services are essential.  Learn more about our data and other valuable services.  Once you identify your properties of interest, then the tough work begins - Talking with the owners.  This is a difficult step, no qualms about it.  But difficulty is often the home of opportunity!  You must realize that these home owners can't make their mortgage payments, they are broke, and have been drilled for every penny by creditors.  They are often the victims of divorce, family tragedy, or job loss.  Understand your target audience, your customer, before you offer your services.  Investors work hard by sending letters and even knocking on doors to make contact with the property owners.  The owners of the "We Buy Houses" signs are also targeting these home owners.  Some really good news is that some of these homes are actually being sold by real estate agents during the pre-foreclosure stage.  That means you can do business without considering the owner's personal issues and you even get to see the inside of the home before you buy it!

Once you find the property and negotiate the deal with the owner, now you must hurry and close the deal before the foreclosure auction.  Here you need some fast paperwork.  You can really benefit from your expertise on these matters at this point.  Check our Resources page for some help in this area.  Close the deal, satisfy the lender, and you are the proud owner of foreclosure-free property.  Now go sell it for profit or rent it out for that cool cash flow that gives you money while you're relaxing on vacation.

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Foreclosure Auction and Post-Foreclosure

This is the actual selling of the property to satisfy the mortgage note security deed.  In Georgia it is done on the first Tuesday of each month on the county courthouse steps.  It is a public auction with the property going to the highest bidder.  You do not get to see the inside of most of these homes (remember that most are still being lived in by the owners up to and past the auction, they don't often give tours).  It is the ultimate buyer beware sale.  There are real opportunities to acquire a  property at this stage though there are risks.  Money and Knowledge are mandatory at this point.  Big money can be made or lost in a second.  Good information, good research, and some good fortune are strong prerequisites at this point.  We can help you with the information and the research.  That is our specialty!  The foreclosure auction can be a very confusing event.  We recommend that investors attend a few auctions just to get a handle on the process before they prepare to actually bid on a property.  The auction is fascinating, but quite chaotic in nature.  The foreclosure auction is typically the stage where the experienced foreclosure investors make their money.

The post-foreclosure stage is where the inexperienced investors can get their feet wet.  The opportunity for most individuals at this point is to attend the auction and see which properties complete the foreclosure process and maybe find out who the new owner is.  At the auction, many properties will not get bid on and will go back to the mortgage company.  The primary reason that many homes go back to the lender is that the amount owed on the house is very close to what the house is worth, and little profit margin exists.  For the properties that are sold to investors, your opportunity at this point is to make an offer for these homes.  You can also find a significant list of post-foreclosure properties owned by mortgage lenders, called REOs, through real estate agents.

You can get a good deal at this point by working with a Real Estate Agent knowledgeable in the foreclosure process.  The trick here is in finding an Agent who not only says they know foreclosures, but one who actually does a large (50% or more) of their business listing or selling foreclosed properties.  See our Resources page for some recommended Real Estate Agents that specialize in foreclosures.

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Opportunities

In one Georgia county (Gwinnett) there are approximately 400 homes per month that start the foreclosure process,  Of this number there may be 50%  which actually go through the foreclosure process to the end, and of these homes, only a few are worth investing in.  If you are an investor looking for rental property, or property to renovate and resell, you need to determine which stage of the foreclosure process is best for you.  Then you need to get the best information on the properties and do your research to find the best deals.  If you are looking for your own home, you have to be flexible in your desires.  A realistic approach is to look for a 10 - 15% discount below appraisal on a property, realizing that most will require some repair to get them back into shape.  At that discount level, these homes sell fast, very fast. $20,000 -  $30,000 off on a $200,000 house does it every time.

If you didn't find anything of interest that we have listed  for sale now, give us a call with what your looking for, as we do keep a record of buyers and what they are interested in.  Often homes are sold prior to getting them listed on this web site, so please contact us and  let us know what you're interested in.  The other approach is to contact a Real Estate Agent experienced in foreclosures.  See our Resources page for some recommended Real Estate Agents that specialize in foreclosures.

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Important Notice

All information on this website is believed to be accurate but is not warranted.  We recommend that all users of this information fully research and independently verify all information found on this website prior to making any investment decision.

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