5 ways to find Pre-Foreclosure Deals – Investors Guide
Wholesalers and off-market investors…
Pre-foreclosures should be a source of deals you tap into all year long.
So we’re going to dive into not only how to find these deals…
… But how to market to them, how to talk to motivated sellers, and how to navigate the rocky road of foreclosure in your state.
Let’s dive in…
What is Pre Foreclosure
Pre-foreclosure refers to the legal status of a property when the homeowner has fallen behind on mortgage payments, triggering a pending foreclosure process initiated by the lender, typically before the property is auctioned.
In simple terms, pre-foreclosure happens when someone is struggling to pay their mortgage, and the bank is getting ready to take the house away because of it. It’s like a warning sign that the property might be up for sale soon.
Foreclosure is Sensitive – Be Aware
Alright, folks, before we plunge headfirst into the world of pre-foreclosure deals, there are a few things we need to chat about. Consider this your friendly neighborhood warning:
1. Beware of the Scammers: Sadly, in this business, just like anywhere else, you’ll encounter some unsavory characters. There are plenty of scammers out there looking to take advantage of people in foreclosure. Keep your guard up, and if something seems too good to be true, it probably is.
2. The Law is on the Homeowner’s Side: It’s essential to know that the law is there to protect homeowners who are in tough financial spots. So, if you’re thinking of using shady tactics or shortcuts, think again. The legal system is designed to safeguard these homeowners, and you don’t want to find yourself on the wrong side of it.
3. Remember, They’re Humans: Last but not least, let’s not forget that behind every foreclosure case, there’s a real person facing financial hardship. Empathy goes a long way in this business. So, while you’re here to make deals and grow your investments, let’s do it with respect and fairness. After all, it’s not just about the bottom line; it’s about helping people in their time of need.
Now that we’ve got that covered, let’s move on and explore the world of pre-foreclosure deals with integrity and smarts.
Know Your Timeline of Pre-Foreclosure
Alright, let’s break down the pre-foreclosure timeline, but remember, the specifics can vary from state to state. Here’s a general idea of what you should know:
1. Pre-Foreclosure Starts: The pre-foreclosure clock begins ticking when a homeowner misses several mortgage payments. This is the initial stage where they’re in danger of losing their home.
2. Notice of Default (NOD): At some point, usually a few months after missed payments, the lender may file a “Notice of Default” (NOD) with the county. This is a formal notice that the homeowner is behind on payments and that foreclosure proceedings may follow.
3. Redemption Period: Some states offer a redemption period after the NOD is filed. During this time, homeowners can still catch up on their payments and avoid foreclosure.
4. Notice of Trustee Sale: If the homeowner can’t resolve the issue, the lender may issue a “Notice of Trustee Sale.” This notice typically sets the date and location of a foreclosure auction. The timeline from the NOD to the Trustee Sale can vary widely by state, from a few weeks to several months.
5. Foreclosure Auction: On the specified date, the property may go up for auction. The highest bidder typically acquires the property, or it reverts to the lender if there are no bidders.
Remember, these timelines can differ significantly depending on your state’s laws and regulations. It’s crucial to research the specific rules in your area to understand how much time you have to work with distressed homeowners.
Now that we’ve got a better handle on the timeline, let’s continue our journey into the world of pre-foreclosure deals and how to uncover them effectively. Stay tuned for more insights!
5 Ways to Find Pre-Foreclosure Contacts
Alright, fellow investors, let’s cut to the chase. You’re here because you want to uncover those pre-foreclosure gems, right? Well, I’ve got you covered. We’re about to dive into the five most effective ways to find those golden opportunities.
1. County Website:
This is your starting point, your treasure map, your insider scoop. The county website houses the most accurate, up-to-date, and recent data – also known as public records. When a property heads towards foreclosure, the county is the first to know. It’s like the frontline of the foreclosure process. So, make friends with your county website; it’s your gateway to pre-foreclosure information.
Ah, Zillow, the household name in real estate. While its pre-foreclosure listings may vary depending on your state, it’s still a valuable resource. Keep in mind, though, that properties here often attract a lot of attention since Zillow is pretty quick with its data updates. But hey, you might just snag a great deal before others catch on.
Now, this one’s a bit of a hidden gem. Yes, you’ll need to purchase access to Propstream, but trust me, it’s worth every penny if you’re running a serious real estate investing business. With Propstream, you can easily pull comprehensive pre-foreclosure lists. It’s like having a magic wand for finding off-market deals.
4. Network, Network, Network:
In the world of real estate, connections are pure gold. Tap into your local network, especially real estate agents. Agents who are well-connected may have pre-foreclosure properties as listings, and you can swoop in with your offer before the rest of the world even knows about them. Attorneys can also be valuable sources of information in this regard.
Yes, newspapers still have their place in the digital age, especially when it comes to pre-foreclosure. Typically, when a property is in pre-foreclosure, it’s legally required to be published in a local newspaper. So, keep an eye on those classifieds. It’s an old-school tactic that can lead you to some fantastic opportunities.
There you have it, five powerful ways to find pre-foreclosure contacts. Now, it’s time to roll up your sleeves and start digging for those hidden real estate treasures. Remember, persistence pays off, and with these methods in your toolkit, you’re well on your way to becoming a pre-foreclosure pro. Happy hunting!
Okay, So you have Pre Foreclosure leads… Now What?
Now that you’ve got your list of pre-foreclosure contacts, it’s time to roll up your sleeves and start the real work – reaching out and building those relationships. But don’t worry, I’ve got a game plan for you:
1. Prospect with Purpose:
You’ve got a few powerful tools in your arsenal here. First up, there’s good old-fashioned mail. Sending a well-crafted letter or postcard can pique their interest.
Next, there’s the art of cold calling. We recommend skiptracing that list you got, then using a dialer like Batch Leads to call them
Here’s a video of cold calling in action:
Yes, it might sound intimidating, but it’s a direct way to connect with homeowners in pre-foreclosure.
Lastly, consider door knocking if you’re up for it. Sometimes a face-to-face conversation can make all the difference.
Here’s a video showing you what you can say to a pre-foreclosure lead:
2. Be a Helpful Resource:
Put yourself in their shoes. Remember, just because someone’s in foreclosure doesn’t necessarily mean they want to sell. Sometimes, they’re looking for information and guidance. Be that resource they need. Offer information on foreclosure assistance programs, local resources, and share your knowledge. But always make it clear that you’re not an attorney – transparency is key.
Advanced tip: Make sure whenever you have contact with the lead, you take detailed notes in your CRM like Investor Fuse or RealeFlow
3. Tread Lightly – It’s Sensitive:
You’re dealing with people who are facing a challenging situation. Approach with empathy and respect. Understand that this is a sensitive matter, and your approach matters. Be patient, a good listener, and offer solutions without added pressure.
4. Follow Up Relentlessly:
Persistence pays off. Keep in touch with your prospects through regular follow-ups. Use a combination of calling, sending mail, and even text messages. Be that consistent, helpful presence in their journey.
ADVANCED TIP: get yourself a CRM (here’s our list of the best REI CRMs) to keep track of these leads and make follow-up easy.
5. Be Upfront About Your Offer:
At the right time, let them know you have a cash offer on the table if they decide to sell quickly. Stress the advantages, like a fast transaction – two weeks or less. But, and this is crucial, ensure that they know it’s their decision, and you’re there to assist, not pressure.
So there you have it, your action plan for reaching out to pre-foreclosure homeowners. Remember, building trust and being a valuable resource can set you apart in this business. Now go out there and make those connections that lead to successful deals.
You’ve got this!