Although foreclosure and mortgage default is an unfortunate occurrence for a homeowner, it does provide an opportunity to identify bargain prices for prime real estate. The best investors are capable of finding potential deals before they go through the foreclosure process, but are also prepared to act during or after borrower default. There are numerous methods used to make this an efficient process, although it does usually take more time than a typical two-party property sale. The process can be well worth the effort however, and allows the investor to buy into the market at cheap prices, and instantly build up strong equity by acquiring properties well below their fair market values.
The best investors become successful because of wide sphere of influence, and have extensive networks with property owners, real estate broker and lenders. Having access to new information is often times more important than any particular knowledge or education an investor actually has. Simply put: it’s not who you know its what you know! By knowing who needs or wants to sell a foreclosure property, the best investors have a jump-start on the rest of the market, and therefore are able to identify potential acquisitions before the average buyer is aware they even exist.
By staying aggressive and maintaining and building a comprehensive contact database, an investor can increase his chances of locating properties before anyone else has a chance to. After an investor has established a strong network of Real Estate contacts, their chances of success in the marketplace is that much more realistic. By establishing a record of successful transactions, an investor will build his/her credibility which can snowball into more business, referrals and more properties to work with.
The more properties one has access to, the better the chance of identifying good deals before anyone has access to them. It is ideal to locate properties for sale before a lender has initiated the foreclosure process, because it can often translate into more efficient transactions, without being subject to any lengthy process whereby the lender/lien-holder may dictate the time-line.
Many of the largest fortunes of America’s wealthiest individuals have been built because of pro-active strategies – the early bird gets the worm! The best investors know their markets cold – average home sale prices, fair market value and who is looking to sell their properties.