So, You Wanna Buy Pre-Foreclosures? by Lou Castillo
So you wanna buy pre-foreclosures? or at the courthouse steps? So many people ask us about this. Here's our '30 second seminar' on it. If you're going to buy Pre-foreclosures--after the seller is behind on her payments, but before the lender's auction date-then there are some pros and cons to consider.
Pros:
1) you've got a good possibility of buying the house subject-to the loan from a very motivated seller who just wants out.
2) you don't need to do any marketing, just read the foreclosure notices (more on this later), pull some comps and do drive-bys.
3) There are several *thousand* foreclosures published each month, in the greater Atlanta area-plenty to choose from.
Cons:
1) You've only got about 3 weeks (to beat the courthouse auction) to contact homeowners and get signed contracts, title work, funding, etc.
2) Most pre-foreclosure homeowners are in denial about their situation and/or mad at the world due to all their stress and debt collection calls they get. So, they're usually not very open or friendly to you and your offer.
3) Most really good deals are redeemed (caught up) by the homeowner, and the foreclosure cancelled, just before the courthouse auction.
Say you decide to jump in and "Play the Pre-Foreclosure Game". Consider doing a lot of bold, cut through the clutter mailings to the pre-foreclosures you're considering, to get their attention and have them call you. Remember, their mailbox and answering machine is filled with debt collection stuff. You need to stand out, and hit them often. You might want to mail a different neon postcard or lumpy mail (trash can, stick of dynamite, handcuffs, etc.) *every few days*, until they've grown to like you or are curious enough to call you.
If you choose to skip pre-foreclosure and actually buy foreclosures at the courthouse steps-then you're dealing with the foreclosing attorney and the lender, not the homeowner. The biggest things to keep in mind is you're expected to pay all cash by the end of the auction day; you'll have to run your own title exam in advance; and you'll probably have to guess what condition of home interior is since homeowner may not have let you inside. Another option is to buy the note/mortgage for cash at a deep discount, direct from the lender, prior to the courthouse auction. You don't have to deal with the homeowner that way, but you do have to have access to funds, and you will still have to do your own foreclosure after you buy the mortgage.
Lou has been successfully investing in real estate since the early ‘90’s, and is now sharing his vast experience with investors around the country. Lou’s students are earning tens of thousands of dollars monthly on their deals using his system. Unlike many of the speakers and mentors in real estate, Lou has both an undergraduate and a Master's Degree in Business and Marketing, and for 12 years he worked managing a 50 million dollar business for American Express.
He was on his way up the corporate ladder until he recognized that real estate offered a greater opportunity for financial freedom, and for the lifestyle he desired. Using his powerful formulas Lou was able to retire from his corporate job at age 37 and follow his passion - his first love - which is investing in real estate.
Lou has developed proven systems that create massive wealth through real estate investing. His unique approach with students is to focus on implementation of techniques rather than the theory. He teaches the “how” of this business – not just the “what”.
He has authored more than 7 books and courses about investing. His latest development ‘Online Real Estate Empire' has been helping investors around the country achieve financial freedom through real estate.
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