Making Big $$$ In Pre-Foreclosure Using Direct Mail! (Part 1 of 4)
Making big $$$ in pre-foreclosure properties is just simply one of the most profitable ways to consistently make money in real estate today. The popularity in recent years of investors taking over payments of mortgages on “pretty houses” has grown exponentially as well as other services and individuals keying into those opportunities.
Now more than ever we have more pre-foreclosures services right at the fingertips of investors to take advantage of. If a company or individual has not already set up shop at your local tax assessor’s office selling pre-foreclosure information, then it’s probably not far away. The fact of the matter is that information in real estate, and especially pre-foreclosures, is the key that makes it so profitable for more real estate investors each day. Accessing that pre-foreclosure information correctly and then implementing your marketing plan to reach those pre-foreclosure leads in simplicity is one technique that many investors literally live off of daily…..and quite well I might add!
Before we go much further it’s almost an insult in one paragraph to describe why taking over properties “Subject-To” existing financing is so profitable. Just on the front end it is worth mentioning that structured correctly you as an investor can make yourself almost “bulletproof” from a liability prospective. With mortgages in recent years there are just some absolutely fabulous interest rates that are obscenely low from a “traditional” investor financing perspective. I mean who can’t make properties cash-flow with 6-8% interest rates? After locating the deals, then it’s mostly a matter of then evaluating how much cash (if any) it will take to:
1) Pay off owner’s equity making it worth their while….note that sometimes no money is required and a matter of offering debt relief.
2) Repairs needed if any to get property in A-1 shape for owner financing specials on tenant/buyer prospects.
3) Catch up the mortgage payments to be current.
The great aspect of taking over properties “Subject-To” existing financing is that the three items listed above does NOT mean you must have a large cash reserve to make these deals profitable for you. The standard rule in real estate of “using other people’s money” is so applicable here. That money may come from your future tenant/buyers, partners, or yes even your cash reserves for the time being. Even if you have to float the deal with your own cash reserves, if the deal is negotiated correctly then all your money can be recouped once the right tenant/buyer is realized for the property.
There are simply a number of ways to get your pre-foreclosure leads by either developing your own personal leads or simply just buying the information that is readily available in your area. My emphasis here lies in this one question I want to ask you:
“Once you get a pre-foreclosure lead, how are you going to turn that into big money?”
Find out next week!
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