I’ve spoken a lot about foreclosures on this site. However, one thing I don’t go into in deep details is:
How the heck do you even go about finding a foreclosure?
If you’ve had little success looking for good foreclosures in your area, then you’re not looking in the right places. Perhaps, you’ve had a shortlist of 10 or so, but they all turn out to be duds. You might be thinking, this doesn’t work for me at all!
Often, it’s just a matter of time and patience. You wait long enough – you’ll find that diamond in the rough. However, you need to be DOING THE RIGHT THINGS to give you as big a shortlist as possible. Like most things that pay off big time, it’s all a NUMBERS GAME!
There are just SO MANY people that go through the foreclosure process, year in – year out. This is very unfortunate for them, but presents a great opportunity for you.
In this article, I’ll go through some common methods to start building your list of MONEY GENERATING foreclosure assets. These are listed in no particular order – some methods are easier than others, but I suggest you do all of them instead of cherry picking anyway.
1. Keep your eyes peeled
Have a free weekend? One of the best ways to find candidates is just to take a leisurely drive around your area. Keep your eyes peeled for signs out the front. Sometimes, advertisements are stuck up at malls and in the paper – look for those.
“Foreclosed, Bank Repo, Real Estate Owned, Bank Owned etc. etc.” – these are all indications that the property is undergoing a foreclosure sale. This in itself can boost your search for foreclosures, but there’s another advantage.
Call the agent listed in the signs, these agents usually have a relationship with banks and will know the other foreclosures on the market. Even better, they can inform you for foreclosures that are about to come onto the market. This will give you an advantage over other who don’t bother with this technique.
This is by far the easiest way to find foreclosures. However, it may not be the most efficient way.
2. Auction Houses/Sheriff Auctions
If you’re looking for some action, check out auction houses or sheriff auctions. These are physical locations where people sit down and raise their hands to bid on houses (I’m sure you have some idea of what an auction looks like.) Here’s a list of auction houses from The Balance:
This is one way to find foreclosures, though I don’t recommend doing this unless you’re a Chinese businessman with wads of cash to throw around. You won’t get any opportunity to inspect the property because they are sold as is. Sometimes, you’ll need to pay cash up front as well.
All these things make me nervous. If you have the cajones of steel then by all means, go for it!
3. Use the internet
Zillow is really good for narrowing down your search for foreclosures in your area. You can specify all sorts of parameters to suit your needs.
4. Network with Real Estate agents
In your real estate investing career, you’re going to need relationships with real estate brokers. For foreclosures, make friends with brokers that work with lenders and the bank. They’ll be in the know of foreclosures that are coming on the market.
Not only that. If they know that you’re a specialist buyer and have made serious investments in the past, then let them know what you’re looking for. They’ll put you in their rolodex of people to call when they come across a listing that will suit you.
The important thing to convey is that you’re NOT GOING TO WASTE THEIR TIME. If you can show that you’re serious about making a purchase, they’re likely to be proactive in bringing you deals because they know that you’re going to make them money!
5. Work with a Real Estate Investment Group
A real estate investment group does all the hard work of finding, negotiating, financing and buying a group of properties. They then manage the properties while selling individual units to investors like us. If you’d rather have someone doing all the work for you then this is a really good way to go about things.
I haven’t taken this approach personally, so I can’t tell you much about it. You can have a read of real estate investment groups here.
These are just some of the ways you can come across more foreclosures. If you imagine your search like a funnel, with prospective properties coming in the mouth, and spitting out some gems at the bottom; then you’ll know that to increase your gems, you must first increase the number of prospects coming in.
I hope all of this made sense, and I’ve probably left some ideas out.
So if you have tried anything that worked for you, then please share it with us in the comments below!