» Add to Your Real Estate Portfolio with Foreclosures » Posted by Realestator      

Yesterday, I outlined the Foreclosure Process Timeline. So how can you, the Real Estate Investor, add to your Real Estate Portfolio while helping someone save themselves from Foreclosure?

Typically not in the First 90 Days. That’s because finding these homeowners at this stage is next to impossible, and mentally they are not ready to accept the loss they are potentially facing.

The Second 90 Days is the absolute best time to find these homeowners, because remember, the 90 Day Notice of Default has been posted publicly. You can sign up for services, for a small monthly fee, that will send you a list of these Notices on a daily basis so you know who to contact. Also, the homeowner’s situation is much more desperate in this phase. A percentage of them at this point may be looking for a way out and will be more receptive to talking to you (some never will, so don’t be surprised).

This Final 21 Days is more risky. At this point you are bidding on the Courthouse steps (literally). You are not allowed to inspect the home, so you will be buying it as is. Also, you must show up with all cash or a cashier’s check to purchase the property, which many investors can not hope to do. If you buy the home and it is mold infested, you’re stuck with it, because there’s no one to turn to for recourse - Buyer Beware!

In the Second 90 Day period it is a much different experience. Normally, you will be approaching the homeowners at the house in question, so you have an opportunity to let them show you around. You can ask them if there are any problems you should be aware of. They may not tell you the full truth, but you’ll have a much better idea of condition than you would sight unseen. You will also have time during negotiations with the homeowner to run a preliminary title report, and possibly bring in a property inspector or your contractor.

Understanding when to approach a property owner in foreclosure is the best way to Add to Your Real Estate Portfolio. Tomorrow, we’ll cover the two different type of deal structures when purchasing foreclosed homes.

For more real estate investing information, visit the realestator’s website at www.real-estate-investing-support.com

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» Posted in Buying Methods on May 24, 2008.

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