You're in Foreclosure - Happy Holidays!

This being the Holidays and all I want to preach a little to the general public about something that is near and dear to my heart. Foreclosures. Or more specifically NODs.

This is somewhat topical because after we do an investment seminar we always get the calls , the emails, the questions.

"How can I profit off of the foreclosures?"

That depends on how honest an answer you want.
Foreclosure rates are up, and will continue to go up.
No secret there.

SubPrime Loans, Option ARMS, Overly Creative Financing, Fraud, Interest Only...
Take your pick at who's to blame.

Maybe they are all to blame.

But here's the scoop.
When you are anywhere between 15 days and 12 months late a lender can start the foreclosure process. This starts by filing what is called a NOD or "Notice of Default" with the county recorders office.

That's just the beginning of the process. The Trustee will set a date in the future to hold the Trustee Sale. You have from now till the sale date to rectify the situation.

Unfortunately, by recording the NOD, it becomes public record that you are in arrears.
Each week I get a list of the newly filed NODs. My list comes from a title company who wants to earn my business. As this is fresh news I can send them a letter explaining how I as a broker can help bail them out. When I do, I'll want to use the title company that provided my list - that makes sense right?

Here's the problem with the system.
As a public record; you, me, and the crook next door all have the same access to the data.
I don't have to go down to the recorders office to get it like you may have to but we all have equal access. It is true you can buy a subscription to sites like foreclosure.com and have the same access I do (just a couple of days later) but that's not the point. The point is that the info is readily available to anyone. The crooks and swindlers are bold and unethical. So bold and unethical that they will drive and knock on the doors of these poor people! Imagine that!

Many times when I get a phone call from a NOD, they have already signed their title over to some unknown person in an effort to save their home. No money exchanged, just empty promises. These would be the previously mentioned swindler types.
By the time I get the call it's usually too late.

But that doesn't mean they all fall for the scams.
Foreclosure happens to all sorts of people.
I have million dollar homes and tumble down shacks on the list.
I see wonderful people and I see people just trying to "put one over on the Man".
I see people who deserve a second chance, and I see people who should have never owned a home in the first place.
I also see people who listened to the wrong "Professionals" and bought off way more than they could chew.

I have mentioned before thatsometimes we can match an investor to a homeowner who needs to sell. The investor may be able to buy and keep the sellers as tenants.
Instant solution to the problem, instant tenants, and motivated tenants.

My Advise:

For the homeowner close to going into foreclosure:
Call a trusted mortgage professional right now!
Don't have one? Call me.
Everyday you wait, another door of opportunity closes.

For the homeowner already in foreclosure:
Do not sign your title over to anyone.
Do not let someone talk you into a short sell.
Like above, everyday you wait another door of opportunity closes.
If a Hard Money Loan makes sense - you can do it without an appraisal, a job, or credit score.
It has to make sense though.

For the Investors wanting to buy foreclosures, "Zero Down":
If you bought a course teaching you to buy foreclosures with no money down or pennies on the dollar, or by short selling - chalk it up to a lesson learned. They do not work.
You'll be building a house of cards following the "system".
Want proof? My favorite is a blog from a guy in Sacramento who's house of cards is in the crumbling stage.
Spend the next couple of hours reading his exploits here: http://iamfacingforeclosure.com
Yeah, he's not the sharpest tool in the shed - but at least he's honest.
Your a fool if you think he's the only one out there.
I run into people like him at every seminar.

Getting a good deal on something is great.
Stealing someones equity while they are down on their luck is not.
Shame On You!

For the Investors wanting to buy foreclosures
(using logic and well planned cash flow analysis):
That's a mouthful, eh?

These are thinking people.
They are looking for a good investment,
not looking to rip off some poor old grandma who's husband just died.

It's this type of investor I will bend over backwards for.
When I connect a NOD with an investor, I get a loan out of it as well.
That makes this deal a Win - Win - Win.

Foreclosures happen fast, you need to be prepared.
Be Pre-approved for what you think you may want to buy.
When the right deal comes up - you are able to act quick.
Think about it.
You were just presented with what looks like a great opportunity.
One catch, it absolutely has to close in 30 days.
What would you like to spend the next 30 days on?
Running around gathering bank statements, tax returns and such getting approved?
or doing your due diligence on the deal making sure it's the right deal for you?
Be a Boy Scout and Be Prepared!

As a note:
There is another kind of investor out there.
The hard core Foreclosure Buyer.
If the deal goes all the way to a Trustee Sale it'll be auctioned off on the steps of the county courthouse. Sounds a little archaic and old western and it is.

The catch here is that you have to pay cash right there and then.
Not real cash but cashiers check.
How do these guys know how much to have the checks made out for?
They don't.
So they'll get many checks broken down in increments they can easily add together to get the final sum.

That's Reason Number 1 why you cannot compete with these guys.
Very few of us have that kind of play money laying around.

These guys are Pros.
I was talking to an auctioneer for these sales and he described it as "Ali Baba and the Forty Thieves". It isn't like a Barrett-Jackson Auction - it's very low key.

Many times he says that if there is little or no equity - nobody will show up.
Sunny day, great location, beautiful house, it doesn't matter.

However, if there is enough viable equity, it doesn't matter if they are standing under the only tree in a lightning storm. It doesn't matter if it's the coldest day in history. It doesn't matter if there was a toxic leak at a nearby refinery. They will all show up!
They'll stab each other in the back, they'll make side deals with others, they'll do everything they can to outsmart the competition. Although it reminds me a little of Survivor, none of these guys ever gets voted off the island. Reason Number 2: You and I probably don't have the proper back stabbing abilities to play in this game (and maybe we don't want to).

That's my rant for the holiday season.
Make someones life a little better today.
Or better yet, as a New Years Resolution,
why not strive to make someone else's life better each and every day in 2007?

I'll be off from today through the first week of January - Happy Holidays to you and your family! See you in 2007