Foreclosure Publications
How To Win At The Foreclosure Game
The foreclosure market has changed considerably since I first started investing and flipping properties. I started out in the early 80’s. At that time there was probably only 2-3 foreclosure sources and they were only vague generalities. Today foreclosure publications and sites number well into the thousands. Practical, down to earth, real life experiences were very rare and mostly non-existent. I had to learn everything by trial and error and making a lot of mistakes. Back then buying foreclosures was an inside game for bankers and their friends. There were roadblocks at every turn. Fortunately persistence paid off and allowed me to buy my first foreclosure and here is the technique I used, which is still very relevant today.
First thing was to make arrangements for capital. (This was the avenue I chose, if you have problem credit and/or little money, there are many strategies you can use to accomplish the very same thing, so don’t worry). My plan was to set up a business account capitalized with enough money to pay cash for a house. I did not want the loan process to take 30-60 days as was customary. I wanted to act fast when an opportunity presented itself. The bank I chose was pro business. When I outlined my plans to buy foreclosures for cash, rehab if needed, then resell them; the banker said he had no models for this kind of business and therefore wouldn’t be able to honor my request. After a little more persuasion on my part, he agreed to look at my deals on a case by case basis.
When I left, I thought all I needed to do was bring him a fat deal (lots of equity) and one that his bank had a stake in. After searching at the courthouse, I found what I thought was the perfect candidate. I drove by the house. Nice neighborhood, two family, needed cosmetics, but best of all, this house was worth in my opinion approximately $100 thousand(were in the early 80’s don’t forget). The owner owed only $55 thousand and the bank was ready to take possession in two months.
I scribbled out a simple note and put it in the owner’s mailbox. The next day the owner called and we talked for a few minutes and set up a meeting. I met with him and viewed the house. Condition was very good, only minor interior cosmetics and the exterior just needed some paint. We agreed on the price of $55 thousand and I arranged for him to rent the second floor while I did the needed work on the house. He was eager to get this debt of his back and still live in the house.
I approached the bank with my offer. The banker was stunned. He couldn’t believe I was back in only a few days! Not only had I found one of his problem loans but he could readily see this was a great deal for him, for me and for the homeowner. The owner would be able to salvage his credit as the foreclosure would not appear in his file as he had satisfied the loan. This was a winning situation for all parties. The banker then said “let’s do it and we can close in 15 days”. We set up a ninety day note with no payments and the note was renewable for another ninety days if needed.
We closed without incident 15 days later. The owner moved upstairs and I commenced the repairs and painting. I put the house on the market with a small ad in the local paper and a for sale by owner sign with an open house that weekend. I sold the house in just two days time, as I priced it under the market. Thirty days later I put $40 thousand in my pocket for a few hours work. I was an inexperienced real estate investor. This was my very first deal! This is something anyone can do if you set your mind to the task and formulate a step by step plan. Everything you need to do the very same thing is waiting for you FREE here: www.foreclosurefolio.com
About the Author
P. Mike Larson has been in the foreclosure business for over
twenty years. He has written past articles on finance, real estate
and tax credit investing. He can be reached at this address……
support@foreclosurefolio.com
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