Hi all,

My first post here! Love the forum.

This is a friend of a friend type story, but good advice nonetheless.

My friend, who’s 22 and been investing in property for about 3 years, loves foreclosures, but does find them difficult to come across.

Most of his come through real estate agents that he remains very close to, checking in weekly to see if anything knew has come on the radar screen. Often, agents will hear from the banks that a property is heading to foreclosure, generally because the RE agencies will bid for the listing.

By keeping close the to agents at different agencies, my friend hears about the foreclosure deals often before they are even on the market. He’s in a position to offer a quick sale to the bank, often without finance (he has investor’s lined up), and before the property has to go to auction.

You have to remember a few things about foreclosure deals:
1. the banks and individual bankers often don’t like dealing with foreclosures, because it makes them look bad: they made the wrong decision in giving out the loan
2. it hurts the bank’s bottom line because often they are offloading a property that is not in very good condition (if the vendor doesn’t have money to service the loan, often they don’t have money to maintain the property)

As has been suggested above, by far the best situation is to get in before the property is foreclosed upon. Running advertisements in the local paper is a possibility – helping out people that are struggling with financial issues – both of you front the bank together, you offer to purchase the property (slightly under market value of course), pay out the loan and take out a new loan. It helps if you’re taking out the new loan with the same bank !

Overall, the best way to find these deals is to stay chummy with the agents. They’ll let you know what’s happening. Something I’ve always found helpful is to ALWAYS when purchasing a property, relist it with the same agent when it comes time to sell – i.e you look after me, i’ll look after you.

Anyway, just some thoughts.

Regards,

Lee Mathers

********************
Lee Mathers
Co-Founder
http://www.apprenticemillionaire.com.au
Visit Apprentice Millionaire for your free, fortnightly newsletter full of stories of success!