Super Money in Foreclosures

Real Estate Foreclosures and filing Bankruptcy is on the rise, which allows us to tap into this multi-million dollar foreclosure industry. In the foreclosure process, bankruptcy is your direct connection to super-motivated property owners who want to sell regardless of price. Profitable real estate investing in foreclosures starts with a motivated property owner.  Getting rid of his foreclosure or bankruptcy problem is his highest priority.  Your role as an investor in foreclosures is to take the property that is causing the problem for the owner at a price where you can make a profit.

It is a challenge to connect with the motivated owner going through foreclosure.  You have to locate him and connect at just the right time – when he has accepted he is going to sell the house and there are few other investors contacting him.

How would you like to have a systematic way to get super-motivated property owners in foreclosure calling you every month begging you to take their house off their hands?  My foreclosure and bankruptcy investing system does just that – connects the foreclosure investor with the super-motivated property owner!  The system starts with the Bankruptcy Court’s computer system. This system, will connect you directly to motivated property owners in bankruptcy with nowhere to turn for help.

Why the Bankruptcy Lead is the Best Lead

Most investors contact property owners who fall into foreclosure as soon as possible.  The problem is that most of the property owners in foreclosure are not ready to move out of their house and want to keep the property.  You hear this in the form of “I want to Save My House from Foreclosure.”  Some investors capitulate to the property owners in foreclosure or bankruptcy and work deals with property owners to allow the property owner to stay in the house through a long term rental, (sometimes called a “sale-leaseback”) often with an opportunity for the property owner to repurchase the home in the future.  For practical and legal reasons I explain in my Law and Investing Course, it is a very bad idea to allow a property owner to stay in a home after it is bought by a foreclosure investor.

The last person the property owner in foreclosure wants to hear from is a real estate investor who wants to take the house.  The property owner in foreclosure explore other alternatives instead of selling the house – namely refinancing, doing a private workout with the lender (often called a “forebearance agreement”), or filing bankruptcy. Few property owners reply to investor’s marketing because the investor is offering a solution the property owner in foreclosure is not ready for.

The property owner is not ready because going through foreclosure and the loss of a home causes property owners to go through the Five Stages of Receiving Catastrophic News (popularized as “The Five Stages of Grief”).  The five stages are Denial, Anger, Bargaining, Depression, and Acceptance.  Most property owners who are at the beginning of their foreclosure are in the denial stage.  They think they will not lose their house and will find some solution before their  house is lost to foreclosure.  They are not ready to sell because they have not accepted that they have to sell.

The property owner in foreclosure needs to be at stage five, “acceptance” before he is ready to sell his house.  Marketing as soon as a property owner is in foreclosure almost guarantees the property owner is in one of the earlier stages (probably denial) and property owners do not sell to an investor when they are not ready to sell.  Instead they explore other alternative solutions.

The alternative solutions are working a second job, borrowing from 401(k) programs, selling luxury items (motorcycles, boats, etc.), running up credit cards to free up money for the house, borrowing from their boss, friends and family, refinancing, and sometimes trying to do a private workout with the foreclosure lender (often called a “forbearance”), playing the lottery, hoping the process stops, and finally filing for bankruptcy.  Occasionally the property owner in foreclosure sue their lender (i.e.; “Predatory Lending Lawsuit) claiming that the bank never should have lent the money in the first place or that the lender violated some other law.  Those solutions are all higher in desirability than selling to a real estate investor.  It is only once the property owner in foreclosure has tried all of the options he has thought of and he has been unsuccessful that he is ready to sell to a real estate investor.

Bankruptcy is one of the last options chosen by property owners in foreclosure . Chances are they have tried all of the options on the above list before settling on bankruptcy.  Once the property owner in foreclosure fails at bankruptcy the property owner is on the brink of losing his home and has accepted he is going to lose the property to foreclosure.  No investors are marketing to him and any solution will seem like a good one to the property owner.  That is why it is easy to use the bankruptcy lead system to make deals.