There’s a lot of competition to find great deals on foreclosures. Finding them is only one part of the process – you also need to know how to capture them.
Here are a few secrets from the pros that we’ve used with great success.
1. Comb through the same listings everyone uses. There’s a lot of ways to access foreclosure data these days – aggregators like foreclosure.com do a relatively good job of combing through default notices, bankruptcies, tax sales and distressed asset lists.
2. Search the lesser-known publications sometimes used by smaller lenders. Most of the publications in major cities are indexed and captured online, but every once in a while a lender will mistakenly only publish in a smaller circulation if they think it meets the legal requirements.
3. Establish great working relationships with at least one broker. When you’re starting out as an investor, you’d better not burn any bridges – especially with the power real estate brokers in your town. The best of the bunch (and that’s a very short list) work with dozens of investors, and they know exactly who is looking to buy what property – they’ll call the ones that they know will close the deal without hassles to them. Once you’re off the short list of folks who get the calls, you probably won’t get back on it. There are too many credible investors looking for great deals for them to bother dealing with rookie mistakes. Interview a few, and make it your intention to give all your business to one person. Make it clear what that broker must do to earn and keep your business, play fair and never compromise your integrity. If you have to fire that broker, do so with grace and it will be a learning experience for everyone. But don’t ever fire a pro on a whim. Be incredibly loyal and it will come back to you in countless ways over the years.
4. Find people before their properties are in foreclosure and help them before a default notice gets published. This one is probably the hardest and most time-consuming method, but it is one of the only ways to avoid the competition of lots of speculators that descend upon any published foreclosure like vultures to a fresh kill. Speaking of which, you don’t win in this business by treating people like roadkill. Remember that your reputation is everything, and act with integrity. People facing foreclosure are in very difficult circumstances, and they need help – not predatory behavior. When we’re able to help people negotiate short sales, lease options and other complex transactions, everyone wins – and no one loses. Behaving with integrity helps us to get amazing referrals and special deals that never hit the open market. People remember what we’ve done for them, and when their friends and family need similar help they send them to us.
5. Find niche investment specialists, and offer yourself up as a service provider. Spend some time getting to know who is doing a great job finding and flipping foreclosures in your market. Get to know them. Call them on the phone, and let them know you want to work with them. Send them your resume, or better yet – a short pitch on how you can help them. If you do a good job of analyzing their needs and proving your value to solve their problems, they’ll probably be willing to give you a job!
6. Think like an investor. We created REIBrain to help you learn the secrets of the pros. This essential toolkit will help you think like the pros – it’s been engineered to train your brain.
