One
of the biggest challenges faced by beginning and experienced
foreclosure investors is the amount of time available to pursue deals.
Foreclosure investing is not inherently difficult if you follow a
systematic, step-by-step process. But it does require some commitment
of time. However, like anybody else, you live with the constant
challenge of allocating time to your families, jobs, religious and
civic duties, and other important activities, including your investment
business. For many of you, this challenge has impacted your ability to
do deals. After all, the more time you spend on one deal, the less time
you have for another. Even worse, this challenge may have prevented you
from even getting started. Therefore, if you are going to become an
effective foreclosure investor, you must be more efficient at
researching, analyzing, and marketing your deals for profit.
In
the last few years, there has been a steady and evolving growth in the
types of online services available to assist investors. Most of these
services are free or low cost, and they are all available on the Web.
You don’t need to buy expensive software or download huge programs. All
you need is an Internet browser and a willingness to use it to make
your investment business more efficient. Some of you may be aware of
this evolution, and may have actually used some of the services. But
for most of you, these services may be just what you need to reenergize
your foreclosure investment business.
Property Listings
You
are obviously well aware of the property listing service at
Foreclosure.com. This online service provides property listings of
preforeclosures, REOs, bankruptcies, FSBOs, and tax liens. The property
listings include details such as property address, tax roll
information, and property description.
You could certainly
use other approaches like combing through the sale notices in local
newspapers, checking the sites of foreclosure attorneys who advertise
their auction sales online, or contacting lenders for their REO
listings. However, these approaches require noticeably more time that
you may not have. Thus, having a single online source of detailed
property information that you can access in an instant is clearly the
most efficient way to research foreclosures and other distressed
properties.
Related Services
For
many deals, you will have the owner’s name, address, and phone number
so that you can initiate contact. But for some deals, the owner’s name
may not be available. In such cases, you can go to a white pages
directory site. Simply do a reverse address search on the property
address to obtain the owner’s name and phone number. This online
service eliminates the time you would normally spend checking old phone
books or calling directory services.
Many cities and
counties offer online access to property records, based on the
addresses you obtained from the property listing service. The records
can include tax assessments, sales history, and book and page numbers
for doing title searches. These local government sites do not follow a
standard approach to providing property information, so you will need
to navigate the sites or search on terms such as “property taxes” or
“real property” to get to the desired Web page. Once you’ve found the
Web page, you will be able to quickly search the records for the
property information you need. This approach eliminates the need for
traveling to and from the local courthouse or library while trying to
research your deals.
Some local governments also offer
online access to title searches, which is really useful for determining
the amount of debt on a given property. The online title search allows
you to use the owner’s name and/or book and page numbers to obtain
financial information. The information includes the original loan
balance, origination date, interest rate, and payment terms for each
lien associated with the property. You may also be able to find out
about judgments against the owner.
In addition, you can use
online property appraisal services to determine the appraised value of
a property. This is a paid service, but may be worth the price if you
plan to do a number of deals and you don’t want to take the time to do
the extra research. The local government sites may provide information
about recent sales for a property, but the appraisal can give you a
more current value based on recent sales of similar properties in the
neighborhood.
Bathrobe and Fuzzy Slippers
As
you can see, these are just a few examples of how you can investigate
deals by taking advantage of online services. You can literally sit at
your home computer in your bathrobe and fuzzy slippers, and complete
many of the steps required to pursue foreclosure deals. Just think of
the enormous flexibility and time savings you can gain from operating a
significant portion of your investment business in the comfort of your
own home.
So if you don’t have a lot of time, using online
resources is the way to go. In fact, it’s the preferred approach even
if you do have more time, because it makes you much more efficient.
Think of how many more deals you can pursue if you could do most of the
research from home. Also, think of how you can now get started if the
lack of time has been holding you back.
Now that you know
about these online resources, you should start taking advantage of them
to help you buy and sell foreclosure properties. Check out the
resources and jump-start your foreclosure investment business.
Online Search for a Sample Property
Let’s
say that you use your Foreclosure.com subscription to search for a
preforeclosure property in your neighborhood. Let’s also say that you
obtained the address 1234 Main Street, along with the contact
information for the foreclosing attorney and the lender. You could then
use a personnel directory site and do a reverse address search to find
the owner’s name, for example John Doe. You could also use the address
at your local government site to find the property description (e.g.,
single family, 3BR, 2.5BA, 2,000 sq. ft.), tax assessment (e.g.,
$205,000), and perhaps even sales history (e.g., sold to John Doe seven
years ago for $140, 000). Furthermore, if your local government enabled
online access to the land records, you could do a quick title search to
find the original loan balance along with payment terms and conditions.
Of course, you would contact the attorney to verify the current balance
and whether the sale is still scheduled, but the attorney may not
provide the additional property details.
Obviously,
some local governments have a more comprehensive Web presence than
others, and some may offer more property details than others. However,
you will still save lots of time and effort by minimizing the time that
would otherwise be required to chase down the details by more
conventional means.
Is this a Good Deal?
Now
that you have completed your online research for the example, you will
be able to do some quick analysis to determine whether this property is
a good deal. Let’s say that the original balance was $126,000 (assuming
a 10 percent down payment), and that after approximately seven years of
payments, the loan was paid down to $100,000. Let’s also say that the
arrears are $6,000, which brings the total outstanding balance to
$106,000. Finally, let’s say that the market value is $212,000. The
loan to value is therefore 50 percent, which makes this a very good
deal.
Now that you’ve completed a quick analysis, and
determined that this could be a profitable deal for you, you would then
contact John Doe and arrange a meeting. Naturally, you’ll need to
change out of your bathrobe to attend this meeting. Assuming he is
interested, you would negotiate an offer to establish a nice profit for
yourself and some moving and rental expenses for John Doe.
Obviously,
this is a simplified version of the deal that covers the basic steps.
For more insight into the step-by-step techniques for identifying,
researching, and negotiating deals, see the book "How to Make $10,000,
$20,000 or More Every Time You Buy Real Estate Foreclosure Properties."
The book presents a systematic approach for buying foreclosure
properties, and is available fromwww.foreclose.com.
Marketing for Profits
Now
that you have closed a deal with John Doe to buy his foreclosure
property, you are now ready to market the property for a quick profit.
You basically have three approaches to flipping this deal. You can flip
the contract through an assignment. You can flip the property in “as
is” condition as a fixer-upper. Or you can rehab the property and flip
it as a property in “move-in” condition. Either way, you can market the
property in the online classified section of the local newspaper, a
FSBO Web site, or the Web site of a local realtor.
Virtually
all newspapers have an online presence, which will allow you to submit
your classified ad online, or by email, for a reasonable cost. The
newspapers provide rate and submission guidelines so you can determine
the size of the ad and the length of time it will display online. You
should also be able to place your ad in the print version for an
additional fee.
The FSBO sites will list your property along
with marketing details for a small fee. Visitors to these sites will be
able to view your online property listing and contact you to start the
negotiation process. There are several such sites, so you’ll have to
check them out to see which one meets your needs.
Realtors
will not only list your property on their sites, but they will also
list it in the Multiple Listing Service. The MLS makes your property
available to all realtors, and increases the visibility of your
property. You will have to contact one of the local realtors to start
this process.
Back to Your Bathrobe
As
you can see, parts 1 and 2 of this article highlight how you can not
only use the Web to pursue deals, but how you can also use it to market
deals for profit. So now that you know about these online resources,
you should start taking advantage of them to help you buy and sell
foreclosure properties. There are clearly several steps you can
accomplish online from home while in your bathrobe. Obviously, the
intent is not to turn you into a hermit who never leaves home, but to
show you how you could be much more productive as a foreclosure
investor. You should recognize that the more investment steps you can
do online, the less time you’ll actually need to pursue a particular
deal.
Again, don’t let the fact that you have limited time
available prevent you from getting started or from making progress. You
have a lot of power in your fingertips, so use them to conduct some of
your investment activities while in your bathrobe. So check out the
online resources and jump-start your foreclosure investment business.
By the way, don’t forget the fuzzy slippers.
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