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In this lesson, you will discover how to buy a home in preforeclosure, make a fortune doing it and even if you don’t have any money for capital.
What is PreForeclosure and Why Should You Care?
Preforeclosure are homes that have made it to a list of homes that are in the preliminary stages of the foreclosure process.
The foreclosure process is involved when a lender seizes a property and puts it up for sale in order to recoup their money.
In the 22 judicial foreclosure states of the United States, the foreclosure process must involve the court while the lenders do not have to go to court in non-judicial foreclosure states.
Why Should You Care About The Preforeclosure Stage(s)
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As you can imagine, the preforeclosure stage(s) is probably longer in the 22 judicial states than the 28 other states.
The preforeclosure period in a non-judicial state such as Texas and California if everything goes according to schedule is 120 days or much less.
Particularly in Texas, the property could be foreclosed on in as little as 45 days while in a judicial state like New Jersey, it takes 12 months or more.
Florida happens to be a judicial foreclosure state.
But a property can be completely foreclosed on in as little as 160 days and as long as 14 months; it just depends on what part of Florida.
Ultimately, the foreclosure process timeline depends on the individual states and what part of the state because it is administered at the county level in most states.
The PreForeclosure Opportunity
…which is the period when it becomes public that a property owner defaults on a lien or mortgage loan and the take-over of a foreclosed property, you can slide in and make an offer.
The owner remains the legal owner throughout the preforeclosure period.
The longer that period is, the more the homeowner realizes they probably cannot afford the property.
On the contrary…
From my experience in certain types of neighborhood, the longer the preforeclosure period, the more comfortable the owner or tenant gets with the idea of living in a property for free.
Nonetheless, the preforeclosure period is a great time to slide into property owners inboxes, text messages, mailboxes to present an offer to purchase the property at a significant discount.
Preforeclosure Homes @ 65 Cents On The Dollar
It’s a numbers’ game.
And what you are looking for is a motivated seller.
These are property owners who have concluded that a property is a liability and needs to be gotten rid off.
What I want you to do is download a list of preforeclosure in your target area. You can use www.EmpireBIGData.com for easily doing that.
Then, I want you to set up an outreach campaign that offers to buy their properties for cash and receive calls from a percentage of these prospects.
When they call, you want to present an offer to them based on the 65% rule; what is the 65% rule for presenting an offer?
You should check out a free tool I created for this at www.DealEstimator.com
Essentially, you are looking for the ARV (After Repair Value) which is what the property is worth in today’s market when it’s in perfect condition.
Then you want to multiply that ARV number with 65% and the product is your maximum allowable offer (The MAO).
How To Buy A Home In Preforeclosure Without Your Own Cash
It’s a marketing game.
Initially, this does not have to be about you buying this property for your own portfolios.
You can do so if you can afford it.
But you do not have to be able to afford buying a whole preforeclosure home before you can get it in the game.
When you get really good at finding and negotiating these types of deals, there are many people like me willing to take over the deal disposition and pay you 2% or more of the ARV.
Let’s put that 2% in perspective.
The highest I have made from a single deal like this is $82,000 but I have averaged between $15,000 and $35,000 per deal.
If you do enough of those deals, you will eventually be able to afford to retain some of them for your personal portfolio.
So you do not need your own capital cash in order to get in the game. A few hundred dollars for marketing will get you started.
Investing in coaching and mentorship can make success a little faster and inevitable of course.
Can You Find These Deals on Zillow?
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Sure you can.
But the process of sorting through houses to collect enough data in order to turn this into a lucrative business venture will be too excruciating.
It’s not worth it.
Tell me in the comment area any questions you may still have about buying a home in preforeclosure. Next time if you want, we may discuss some of the pros and cons.
Just know for now that the pros outweigh the cons when you treat it like a business and not a hobby.
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Real Estate Money Secrets at:
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Check out the next video on the screen for more information all about making money from home.