When prospecting any foreclosure investor that knows their salt one of their first questions that will come is “Do you door knock?”. If your answer is no, you lost yourself an investor. If your answer is yes, YOU BETTER PROVE IT. Cause when push come to shove, and you haven’t produced, they will know you lied, and then statistically speaking your former clients will tell 12 people how you lied to them. So, before you speak check every fear at the door, for when your hand reaches that solid core be prepared for what comes. The person on the other side of that door is scared, in denial, angry, addicted to some drug (usually a alcoholic, statistically speaking in Washington), has a savior medical issue (mental impairment or physical), and has some story to go along with all of it. And unless you can muster the empathy and will to patiently LISTEN, you are in the wrong area of work.

Next knowing you have the courage to deal with what is on the other side. You need prospects. How do you get prospects? There are many resources. I prefer realtytrac.com they manage the most extensive foreclosure research site I have see online. You have to pay of course, but if there is money to be made, it is usually not free to get there. Don’t be afraid, you need at the data you can collect to limit your possibility of failure. But at the same time don’t be afraid to mess up, because human dynamic predicts you learn the most from failure. So enjoy the lesson, and don’t do it again.

After you have formed your prospecting list and knocked on many doors after most likely weeks of labor. You obtain an interested party, do not ruin it trying to take them for the bottom dollars. You will put your self back at the end line with all of the other people knocking on their door. So remember WIN/WIN. You get what you need and they get what they need. Be honest if they ask you about your profit, show there is nothing to hide. With that honesty, you will create a business that has many return clients.

When writing a deal for a short sale there are a couple of things to remember.

1.You are representing the money, so don’t let the bank push you around. You hold the ability to help the bank satisfy there mortgaged debt load. Right now in this market financial institution have hurt themselves over the amount of debt they have assumed to the real assets they have. It is not your job to take care of their investment mistakes. So, when they start talking about reducing your commission, start talking about walking and them getting nothing.

2.You need a good title and escrow company. Don’t just use the people you have been working with for years. Go take a couple of short sale classes sponsored by different title companies to figure out who has the strongest staff for dealing with this type of sale. I did, now it as brought less stress to me and my clients.

3.Don’t try to super low ball the lender. Because not only does the primary lender need to get paid, in most cases the secondary lender needs some gravy to help cover their losses. So remember to negotiate with the secondary lender to make sure they don’t kill the deal because unless they sign off too, to clear the title the DEAL IS DEAD. In the cases I have dealt with, we have negotiated to just a few thousand dollar pay-off for the secondary lender.

I spent Friday combing through the ROE properties in all the zip codes that start with 981**, 980**, and 982**. Let me tell you, I had a great discovery. There were a total of 15 available, out of the 1200 or so foreclosures in the month of February in those zip codes. There are only 15 homes that didn’t get bought at auction and went back to the lenders possession to be sold by the lender. Out of those 15 a number of them were around Boeing Field, so it is understandable why they were not bought at auction. The properties that were not bombarded with aircraft engines every few minutes either didn’t exist on the MLS or had been sold in the matter of days. Then there is One left, and by Monday it will have an offer.
Daily I get emails from prospective buyers telling of there desire to purchase a foreclosure or REO property. The individual’s idea from media influence is that, there are a flood of these on the market. NOT TRUE! But it is easy to see how one would have this idea with the mass amount of doom and gloom that is portrayed. Yes, Washington in February had a 9% increase foreclosure filings, says Realtytrac.com. Yes, retail priced homes are sitting on the market twice as long. But just by advertising your home is in trouble and you are willing to accept an offer that 20% below market value, I bet by 6 o’clock that evening you will have a number of offers and an intense increase in foot traffic in your property. I make this statement to make a point that the MONEY really hasn’t gone anywhere, it just has gotten more shrewd. If you are the home owner and you are in trouble create a buying frenzy, just over the idea that you home is way under valued, and pretty soon you have a bunch of egos trapped in a bidding war. And a possibility of you getting much closer to market value for your home becomes real. You might take a 10% hit on the market value of your home but it won’t be twenty.

1. The concept of purchasing real estate for a sum that could be the tenth of the value of the home is, UNREAL!

The Reality is that homes in Washington that are being sold at auction are being sold at close to market value. Why? 75% of all homes that are in foreclosure where bought after 2003, of that 75% of foreclosed home 85% of them where refinanced in 2005. After these home where refinanced people pulled there equity out and did not pay off other debt, they spent themselves into more debt. So now in the beginning of 2008 these homes are going to auction with little to no equity in them. Which makes purchasing at auction fruitless. The reason for this fruitlessness is not only have you just paid off the primary lender at about 20% of the real estate actual market value. You now have to pay the back taxes, and you will need at least 10% market value of the home to repair its distressed state. Now you are Possibly sitting on 10% equity if you are lucky. In this market there is no way for you to sell the home at market value, which means you will need to sit on the property until the market recovers. Which is 2 to 3 years away.

2. Purchasing a home at auction for the minimum bid is, UNREAL!

The Reality is at auction there is about 60-70 people there on any given Friday. 60% of those people are representatives of companies that have millions and millions of dollars of purchasing power. You will also see everyone of the people with a bundle of papers they are flipping through, these papers are title reports. Which says they have done their homework on every property that is being bid on that day. So when a property that will yield the profit they are looking for, they have a RED LINE mark, which is the maximum bid possible for profiting on that purchase.

3 . You can get financing to purchase that property at auction, this is UNREAL!

You must have CASH at auction. when that auctioneer says sold you hand that person a cashiers check for that amount. You asking yourself, “How do I get a cashiers check in that amount in that moment?” You don’t. You have to bring multiple cashier checks in many denomination, so you can giver them as close to that price as possible, and you will be over paying. How do I get that money back? Right. In 4 to 6 weeks you receive a check back from the Trustee company for the difference. There are Hard Money Lenders, but barrowing money from the mafia never goes well.

4. Well I can just take over the home owners mortgage and do a “Quick Claim Deed”, UNREAL!

The Reality is you are leaving yourself open for being sued by the previous owner for fraud, and with the States Attorney General is prosecuting these cases and the previous home owners are not loosing. Why Fraud? Because the home owner is under extreme duress.

What is a good way to invest in foreclosure?

1. Work out a Win/Win deal with the home owner. If you don’t know what a Win/Win deal is. It is where everyone walks away from the negotiation table unhappy. And if there is now way for the home owner to win, because of the situation they have put themselves in. Be honest about that. That way respect is created, and at least they are able to relieve themselves of the burden.

2. Do not buy a house just because it is in foreclosure, make sure the equity is there.

3. Broaden your scope of equity investment. More time then not I have gotten great deals, just because the home owner needs out of the home. These people are not in foreclosure or in bad financial situations, they are inpatient. Use that. Close the deal quick, so they feel relieved and less stress. You will be surprised how many people hate waiting and would rather not have stress then money.

I receive a number of publications that only talk about the foreclosure market. In one of these publications their was an articles about the current presidential canidates position on the trouble people are facing from mortgage default. To give a very brief over view, Hillary backs a 100 billion dollars cash give away, as does Obama with a 75 billion dollars bail out. On the other side McCain thinks tax cuts are necessary to curb the crisis. I think all three of these outlooks are laughable. And I say HAhahah…to them. Market analyst are predicting a 4 trillion dollars fall out, that is roughly 25% of the countries GDP. I have heard the FED telling Americans it will be about 400 billion dollars, I am stating they will be wrong. America has suffered through a rose colored inflation real estate boom. Now people are going to pay for their assumptions, for the amount of real debt that are in, and how it was never affordable. It is tragic to think of the huge homelessness potential, the loss of millions of jobs, and entire towns going bankrupt due to the loss of tax revenue from tax paying home owners.

I tell my clients to help secure their future through this economic down turn by buying Gold, Water, Wal-Mart, or Real Estate. I personally believe investing in real estate will be the best place to keep your assets. Why? Because there is no more land. The earth is constantly creating more minerals; might take a while; but she is doing it. Wal-Mart now accounts for 2% of the U.S.’s G.D.P., so they are not going anywhere soon. As for water it’s something we can’t due without. People are not stopping having babies, companies and cities are not getting smaller. What is the commodity that will always need so that humans may survive? Land. Space is precious and currently I believe over the next fours years it will be cheaper for an able person to purchase more of that limited resource than could have in the past 20 years.

Here is where I think there actually will be opportunity, unlike anything in American economic history, it is the ability to create security for the rest of your families life. I say family, because real estate ownership lasts as you or your Will deems it too. The opportunity is foreclosure real estate investment. There is starting to be more and more property in the U.S. that is being sold at far less than what is it worth. What happens when you buy low, and then sale high? You make profit. Selling at top market value is not feasible right now, but in a few years, when the economy recovers, you not only will make money from the few years of ownership. Your profit margin will be far greater then other comparable real estate. I Believe for the first time in close to 40 years real Americans that have saved their money; and not put themselves in the robbing Peter to pay Paul scenarios; can achieve generational wealth.

You hear on the news in the present day constant gloom and doom economic outlooks. If you choose to adhere to such persuasion, you are going to miss out on the strongest money making opportunities of the 21st century. There are certain economic principles that allow you to make the most money on the down. I believe the foreclosure real estate market will be the next .Com Billionaire Boom. I have created a company Steps ahead of any competition. We are able to analyze massive amount of foreclosure data to the BEST statistically significant properties. Which will yield the most probable equity the math could find. The possibility of creating awesome wealth through equity based real estate investments is here. Don’t you want to take over the market? I do.