www.DuncanStopForeclosure.com
\n<\/strong><\/p>\nEven if you receive no responses initially, keep running your marketing ! Homeowners viewing your ad for the first time are often hesitant to call. Yet, studies indicate that individuals typically need to see a particular advertisement at least three times before they respond.<\/p>\n
Homeowners do not want to deal with a fly-by-night company; they need and want a professional. I regularly receive calls from homeowners telling me they have seen my ad for the past month, but were wary of calling. When asked why, they say, \u201cWhen you\u2019re in the situation we\u2019re in, it\u2019s life and death; so we need to work with a true professional.\u201d<\/p>\n
So you see, don\u2019t give up. Keep running your marketing.<\/p>\n
Pre-foreclosures can also be found by sending postcards (in addition to your letters). My practice is to use www.CLick2Mail.com and upload my postcard for them to print and mail.<\/p>\n
I tend now when doing postcards I will send to the 30\/60\/90 day late list BEFORE the houses go into foreclosure.<\/p>\n
As seen below, postcard #1 is mailed first, and postcard #2 is mailed second. Take a look at their format. You can even use the same ones yourself,\u00a0 because THEY WORK!<\/p>\n
#1<\/strong><\/p>\nAre You Behind in Your<\/strong><\/p>\nMortgage Payments?<\/strong><\/p>\nWE CAN HELP!<\/strong><\/p>\nWe Buy Homes! Any Area or Condition!<\/strong><\/p>\nFAST CASH… IN 2 WEEKS!<\/strong><\/p>\nCALL NOW! 555-555-5555<\/strong><\/p>\n#2<\/strong><\/p>\nDo You NEED<\/strong><\/p>\nMONEY FAST?<\/strong><\/p>\nI Have $9,000,000 Available!<\/strong><\/p>\nWe Buy Homes! Any Area or Condition!<\/strong><\/p>\nFAST CASH… IN 2 WEEKS!<\/strong><\/p>\nCALL NOW! 555-555-5555<\/strong><\/p>\nYou MUST send a postcard every two weeks. REMEMBER what I said before, the more they see your literature or ad in front of them, the better your chances the homeowner will call. Don\u2019t forget \u2014 just one call can equal $60,000 for you. So review your lists each month and send each homeowner this series of postcards. Keep in mind that postcards are cheaper to mail than letters!\u00a0 Using Click2Mail.com there is no folding, stuffing, or sealing involved. It takes me a mere 10 minutes per week to send out my mailings! Do you see how easy it is to locate pre-foreclosures?<\/p>\n
Once you locate and go under contract for one of these properties, you can either acquire financing and keep the property for yourself or assign the contract to another investor. (How to decide on what to do and do so profitably is explained in succeeding chapters.) It\u2019s that easy!<\/p>\n
Let me tell you, I have picked-up many profitable properties by working the preforeclosure market. Many of the most successful real estate investors admit that the\u00a0 greatest profits are made in this market.<\/p>\n
Online Information Bureaus<\/p>\n
For those of you who would rather not spend time looking through courthouse records for Notices of Default, I recommend a real estate information bureau called DataQuick<\/em>. DataQuick is a great company that can not only give you up-to-date listings of all Notices of Default properties in your area, but provide a valuation service whereby you can receive sales comparables (values of similar properties in the same geographic area) for any property you are looking to purchase. DataQuick currently charges $99 per month for access to all their services, including up to 250 searches per month. To access their site just logon to my website, www.fastcash.com<\/em>, then click on the DataQuick link. If you are serious about becoming a player in this business, I highly recommend that you sign up for their service.<\/p>\nPre-Foreclosure Letter #1<\/h3>\n
Dear <<HOMEOWNER\u2019S NAME>>:<\/p>\n
Do you know that TIME IS RUNNING OUT? As I was looking through the \u201cNotice of Default\u201d records at the county courthouse, I noticed YOUR NAME!<\/p>\n
Do you realize that in about 10 weeks your home will be AUCTIONED OFF at a Sheriff\u2019s Sale? Do you realize what this means? You will LOSE ALL YOUR EQUITY in your home, not to mention RUIN YOUR CREDIT! RUIN YOUR CREDIT\u2014OH NO!!! Do you know what happens when a foreclosure is recorded on your credit? If you don\u2019t, then let me to you… YOU CANNOT BUY ANOTHER HOME FOR 10 YEARS! Scary… Isn\u2019t it?<\/p>\n
If you care about your family, which I KNOW YOU DO, then you must… LISTEN TO ME! Don\u2019t be like most homeowners who are losing their homes and IGNORE THE WARNINGS! Don\u2019t let your pride stand in the way of accepting my help at a time like this \u2014 when you so\u00a0 desperately need it.<\/p>\n
TRUST ME… I know what you\u2019re going through! Your bank has more than likely stopped wanting to talk to you! The only thing your bank now wants is to take your home from you. And in almost 10 weeks from now, they will! But the good news is I CAN HELP YOU. I am a real estate investor who can help you sell your home fast! You can have LOTS OF MONEY IN YOUR POCKET WITHIN FIFTEEN DAYS!!!!<\/p>\n
If you want to SAVE YOUR FUTURE, then WE NEED TO TALK! My direct telephone number is <<YOUR TELEPHONE NUMBER>>. There is NO obligation. Our conversation will be held in the STRICTEST CONFIDENCE.<\/p>\n
Sincerely,<\/p>\n
<<YOUR NAME>><\/p>\n
Pre-Foreclosure Letter #2<\/h3>\n
Dear <<HOMEOWNER\u2019S NAME>>:<\/p>\n
I STILL HAVEN\u2019T HEARD FROM YOU!!! But I guess you\u2019re like the many homeowners who IGNORE THE WARNINGS and end-up waking one day to find the Sheriff outside their door, ordering them to vacate their home. Do you want this happening to you? Do you want your kids asking you, \u201cWhere are we going to live now?\u201d Please understand that TIME IS OF THE ESSENCE! A Sheriff\u2019s Sale is pending on your property, located at <<HOMEOWNER\u2019S ADDRESS>>.<\/p>\n
This is a VERY SERIOUS MATTER! As I mentioned to you in my last letter… I CAN HELP YOU! Don\u2019t be embarrassed to ask a professional like me how to save the equity in your home. If you let your home get auctioned off at a Sheriff\u2019s Sale, you will not get a dime. Not to mention, the bank will come after you personally and sue the pants off you!!!<\/p>\n
Remember… YOU HAVE A CHOICE! You have a golden opportunity to sell your home to me and walk away with LOTS OF MONEY IN YOUR POCKET. WITHIN 15 DAYS I can purchase your house and you\u2019ll have enough money to END YOUR HASSLES FOREVER!! Doesn\u2019t that sound great? You WILL walk away with enough money to make a fresh new start and even be able to buy new home. I\u2019m just a phone call away! Call me immediately at <<YOUR TELEPHONE>> so we can get started immediately.<\/p>\n
Sincerely,<\/p>\n
<<YOUR NAME>><\/p>\n
P.S. \u2014 Any conversation will be held in the strictest confidence.<\/p>\n
ABANDONED HOMES<\/h2>\n
The one distressed property market that most real estate investors ignore is abandoned homes. Abandoned properties are identifiable as those which are boarded up, or they may simply have a very poorly maintained exterior. While these homes require some leg work, you can pick-up some extremely profitable properties just by driving around your area. Simply cruise areas of interest, jotting down the addresses of boarded up or poorly maintained properties. After accumulating a sizable list (at least 10 properties), travel to the Tax Assessor\u2019s Office in the city where the properties are located. Once in the office, inform the attendant that you need to access the names of owners of your list of properties. Some Tax Assessor Offices will supply you the names from their computer, while others will give you tax books from which you will have to find the names yourself. But the job is easy. Using a property\u2019s address, look into \u201cthe block & lot book\u201d to find the property\u2019s block and lot number.<\/p>\n
Block and lot numbers are legal descriptions tax departments use for properties. After finding the block and lot numbers, look into the tax books and there you will find the owners of the respective properties. The tax book is listed by block number; so once you locate the block number in question, scroll down until you find the property\u2019s lot number. Having found the owners\u2019 names and addresses, it\u2019s time to send them a letter (a sample is included at the conclusion of this section). While the tax book will not give you the homeowners\u2019 phone numbers, once you get the names and addresses, such can often be located online at www.infospace.com<\/em>. At that website, simply type in the owners\u2019 names and addresses, and if their phone numbers are listed, they will be displayed. The point is, if you can find their number, definitely call them.<\/p>\nOne thing to keep in mind with tax books is that the city could be tardy in updating their records of new property owners. A city I purchase my properties in is commonly six months behind in updating their records. So be sure to ask the tax office when their records were last updated. The good news is that now many counties are now online. You can do this from home!<\/p>\n
When looking up the owner\u2019s name in the tax book, you will sometimes discover the owner\u2019s address is the same as the property you are researching. Most investors skip over these properties; but I advise not to. Why? When owners move to a new location they leave a forwarding address for their mail, so that mail sent to their old address can be forwarded to their new residence. Consequently, the owner may not <\/em>actually live at the address in question. So remember, always send a letter to the owner of any property you believe to be abandoned.<\/p>\nMoreover, if you see a bank listed as the owner, what you want to do is call the bank! Though there may be no telephone number listed, simply call 1-800-555-1212\u00a0 (directory assistance for 800 numbers) and ask for the telephone number of the bank. If the operator asks, \u201cWhat department?\u201d say, \u201cThe REO department.\u201d If that department is not listed, ask for the main number. Then call the main number and ask for the REO department. When you get the REO department, tell them you\u2019re inquiring about a property. Give them the property address and they will connect you to the person who handles that area. Once connected, ask that individual about the property in question.<\/p>\n
They will supply you the name of the realtor the property is listed with. Follow-up with a call to that realtor, asking for the information you need. (See the following section for an explanation of REO properties, and good questions to ask about REO properties.)<\/p>\n
Driving around, looking for abandoned houses is one of the best ways to locate profit yielding properties. These are the most distressed properties as no one is living in them. As a result, such owners are 100 times more motivated to sell than those who live in their homes! So remember, NEVER drive by an abandoned property without writing down the address and going to the tax assessor to find out who the owner is. MAKE THIS A HABIT! Also, always visit the neighbors of such property. They may very well known who the owner is, how to contact him, and how long it has been abandoned.<\/p>\n
Chances are they will be more than pleased to give you this information because no one enjoys living near an abandoned house.<\/p>\n
Abandoned House Letter<\/h3>\n
Dear <<HOMEOWNER\u2019S NAME>>:<\/p>\n
We are a real estate investment company interested in buying property in the <<CITY NAME>> area. While driving through your area, we noticed that your property on <<PROPERTY ADDRESS>> is currently boarded up.<\/p>\n
Would be interested in selling us your property? We will pay you CASH FOR YOUR HOME\u2014WITHIN 15 DAYS. We are also willing to payoff ALL your LIENS and ALL back TAXES owed against your property.<\/p>\n
JUST IMAGINE! You will be able to PAYOFF all those liens and back taxes owed against your property and put CASH IN YOUR POCKET. We have helped many homeowners just like you in the past and we GUARANTEE that we will put CASH IN YOUR POCKET by buying your home.<\/p>\n
Whatever you decide to do\u2014PLEASE TAKE ACTION NOW! Time is passing quickly; you could lose your home to a tax sale if you don\u2019t call me immediately. My direct number is <<YOUR TELEPHONE NUMBER>>. There is no sense keeping your house and having taxes and liens recorded against your property and your credit each day! I look forward to hearing from you.<\/p>\n
Sincerely,<\/p>\n
<<YOUR NAME>><\/p>\n
REO PROPERTIES<\/h2>\n
REO Properties, or Real Estate Owned properties, are properties owned by a large agencies or institutions, such as banks, HUD, or the VA. Banks acquire such properties through real estate auctions or Sheriff\u2019s Sales. For example, Mrs. Whitley falls behind on her mortgage payments. As a result, the bank sends her a Notice of Default and begins foreclosure proceedings. When the property is actually foreclosed, it will then go to auction or a Sheriff\u2019s Sale. If someone bids on the property at the Sheriff\u2019s Sale and wins, that bidder is responsible for paying the bank that open mortgage. If there are no bidders \u2014 which can occur if the liens or open mortgages exceed the value of the property \u2014 the bank then takes over the property. As a result, it is now considered an REO or Real Estate Owned property.<\/p>\n
Keep in mind that banks are not in the real estate business; they are in financing. Consequently, they do not want to hold onto these properties. They want to sell them as fast as possible. This spells \u2018opportunity\u2019 for the savvy real estate investor. This is not to say that banks give these properties away, but you can find some great deals. I purchase more than half my distressed properties through banks. But please understand, when looking for REO properties, you cannot go directly to the bank. While many individuals selling foreclosure programs state that you are to go directly to the bank to buy their REO properties, this is ill advised. All banks sell their properties through real estate agents or brokers (see the next section for an explanation of these characters). My advice, then, is to go directly to these agents. Prior to putting them on the market, these real estate agents normally evict any tenants dwelling therein, have an appraisal done to determine value and cost of repairs, and board up the property in an effort to prevent vandalism. When purchasing REO properties, they are sold \u201cAs-Is.\u201d No warranties are made or implied.<\/p>\n
Therefore, it is crucial to perform a thorough inspection on these properties prior to making an offer. When looking for REO properties be sure to visit a few REO real estate brokers. Do not deal with just one broker. Why? Because all banks use different brokers to handle their REO properties, there are a variety of REO brokers, and different brokers manage different types and numbers of listings. Some handle much larger REO property listings than others. As there is tremendous potential for you in this market, it is vital that you get to know as many REO brokers as possible, particularly the \u2018big\u2019 brokers. You\u2019ll know how big a broker is by the size of his property list. While law requires brokers to place these properties on the Multiple Listing Service (MLS), which identifies all properties for sale in a given state, often the properties are already under contract by the time this occurs; in other words, they are already sold. So as you become friendly with REO brokers, letting them know who you are \u2014 that you are a genuine player, ready and able to close on any property within 30 days with ALL CASH \u2014 they will be much more likely to contact you with any fresh listings. By way of side note, there is never need for you to disclose to brokers how you generate cash for your deals. They never need to know that you use hard money lenders or private investors. It is none of their business.<\/p>\n
When they ask if you have all cash, just say, \u201cYes\u201d! In all my years dealing with REO brokers, I have never let them know I use private investors, because if they hear that you use hard money lenders or private investors, they will likely conclude that you will be unable to close within 30 days.\u00a0 Remember, these brokers work on commission, so the faster you close, the faster they get paid; this means the faster you close, the more they will desire to do business with you in the future. By telling the brokers you are paying with all cash, you are actually being truthful, as you are paying cash. The only crucial matter is that you either need to have your financing set-up before you begin making offers on properties or go under contract and assign contracts to other investors for a fee<\/p>\n
So now you\u2019re probably wondering where to find these REO brokers. The best place to find them in your state is online at www.reonetwork.com<\/em>. Once at that website, simply choose the state where you want to buy and sell properties, and a list appears specifying all brokers who deal with REO properties. From that point, give each of them a call and inform them that you are a real estate investor who buys properties for ALL CASH and would appreciate a list of their bank owned properties. Smaller brokers won\u2019t have a list, whereas the larger ones usually do. Once you receive a current list, drive by each of the properties, inspecting both their exterior appearance and the neighborhood in which they are located. Before contacting a broker to conduct an interior inspection of a\u00a0 given property, be sure to determine whether the list price is within your range. If not, you could still submit a low ball offer, but it would likely be rejected.<\/p>\nOffers I make on properties are typically 85% of the list price. That is, if the property is listed for $100,000, I\u2019ll make an offer of $85,000. While banks will usually not settle for less than 88% to 90% of the list price, other factors, such as how long the property has been on the market, can lower that figure below 88%. Once again, when you receive your list of properties from the REO broker, review the list prices and drive by the properties. If a house looks bad on the outside, it will likely look bad on the inside. The drive-by, then, gives you a good idea as to whether the property is fairly priced. If it is fairly priced, I call the broker and arrange to see the interior of the property. If after a walk through of the property and working the numbers, it appears to be a good deal, submit an offer. Keep in mind that compared to preforeclosures, divorce, probate, abandoned, or other distressed property, in which you can put a mere $100 down to secure the property and make the contract legally binding, this is not so with REOs. Rather, REO offers must be accompanied by a $1,000 check. Why? The banks want you to put your money where your mouth is! They want to know if you\u2019re serious. That\u2019s understandable!<\/p>\n
While coming up with that $1,000 deposit can be a hassle, on the whole, I find this market to be the best. Why? Once you become friendly with a few REO brokers and have proven you will close the property when you say you will, they WILL call you when they get a new listing. I presently purchase one to two properties per month from my REO brokers. They just call me and off I go to see the property. I have worked with these brokers so long and developed such a rapport with them \u2014 they now know what I look for in properties, particularly pricing \u2014 that I end-up purchasing about 99% of the properties I go see. This means I waste no time looking at dead properties. I only spend about one hour per month looking at the properties they refer me to. So if \u201ctime is money,\u201d this is time well spent!<\/p>\n
Other sources for REO properties are HUD and VA homes. HUD homes are those owned by Housing and Urban Development, a federal agency, and are sold through a bidding process. You can find listings of HUD homes at www.hud.org<\/em>, and bid on those homes through HUD brokers, who can be found at the same website. Another worthwhile feature of the HUD website is that after signing up, they will send you new HUD listings by email. Offers placed on HUD homes must also be accompanied by a $1,000 check. These homes are classified as either owner-occupant listings or investor listings. As you are an investor, you can only bid on investor listings. Any questions as to the category of a particular listing should be directed to the HUD broker you work with. An important but little known fact is that HUD rarely accepts bids lower than 93% of the list price. So don\u2019t waste your time making bids lower than that.<\/p>\nVA homes are those owned by the Veterans Administration, another federal agency. They are sold in the same manner as HUD homes, through a bid process. The 93% of list price minimum bid also holds for these homes. The difference is, all listings can be bought by an investor. To acquire a listing of all VA homes, just logon to www.vahomes.org<\/em>. Once again, subsequent to signing up, the VA will issue you a list of all their properties by email.<\/p>\nHUD and VA homes are a good source of properties. Though there is a lot of competition, you can find some good deals. I have purchased quite a few properties from both agencies.<\/p>\n
Players of the Game<\/h3>\n
In the above section, throughout the rest of this document, and presumably in your upcoming future, reference was and will be made to a number of professionals in the real estate business. As it is, however, many people tend to be confused about who is who and who does what. Allow me to alleviate your confusion. Real estate agents <\/em>are salespeople who have undergone a certain degree of education (at least a 30 hour course), have taken and passed a 2-3 hour, 80-100 question exam, and have consequently been licensed by the state in which they conduct business. They cannot, however, do business independently. Agents can only help people buy and sell real estate as they are sponsored by a licensed broker.<\/p>\nReal estate brokers <\/em>are former agents who have more experience at helping folks buy and sell property (2-3 years minimum), have received advanced training, and have passed a more rigorous exam. Having successfully jumped through all these hoops, they are then licensed by the state in which they do business. Brokers can do things agents cannot. Most specifically, brokers can and usually do oversee a number of agents. They make sure the agents attend to all the necessary elements as the agents8 help others buy and sell property. Brokers also commonly help agents do their work by providing the agents office space, telephone access, and training. In turn, agents must share a percentage of their commissions with their brokers. Whether a broker or agent, common sales commissions for their part in buying or selling a property ranges from 3 to 7%. 8 \u2018Agent,\u2019 by the way, means \u201cone who does something in behalf of another.\u201d In this case, agents buy and sell property in behalf of the broker they work under.<\/p>\nThe last of our cast of characters that needs explaining are \u2018Realtors.\u2019 Realtors are simply real estate brokers who are also members of the National Association of Realtors (NAR). They become members primarily by paying annual dues. Brokers who are NAR members can choose to be called Realtors, a term which is a registered trademark of the NAR. As a consequence, only NAR brokers can legally be called Realtors; non-NAR brokers and agents cannot.<\/p>\n
DIVORCE PROPERTIES<\/h2>\n
A source of distressed property overlooked by many is that which results from the divorce process. Think about it \u2014 as couples go through divorce, their assets need to be split-up. This usually means their house needs to be sold. This means great deals for you and me! The best deals can typically be had when couples are in a rush to complete the divorce proceedings \u2014 they have to sell their property fast. Consider how many divorces there are in this country. One out of every two marriages results in divorce. For the savvy investor, like you, this means BIG MONEY!<\/p>\n
Now you\u2019re probably asking, \u201cHow do I know who is getting a divorce?\u201d Let me tell you how. The process is just like exploring Notice of Default listings. Simply take a\u00a0 trip to your county courthouse and contact the Data Processing Department. Ask them to print a list of all \u201cComplaint in Divorces Filed\u201d and \u201cPetition for Equitable Distribution.\u201d<\/p>\n
A list of hundreds of names will only cost about $15-25, depending on the state you are located in. As you view the lists, you\u2019ll notice two columns, one for the plaintiff (the individual suing for divorce) and the other for the defendant (the individual being sued).<\/p>\n
Look at their addresses. If you see an apartment number on one, do not call that person.<\/p>\n
You are a real estate investor and looking only for houses. You will then approach\u00a0 non-apartment addressees with a combination of direct-mail and phone calls. Once your list is whittled down to those properties you are most interested in, add them to your\u00a0 online customer management system ( Real Estate Web Profit Website ) and begin marketing them for at least six months. Why six months? Depending on your location, divorces can take up to several years to finalize, including the allocation of the house. So with divorce properties you must really be patient and persistent. But once your marketing system is set-up and you continue working it, leads will pour in.\u00a0 The nifty thing about this market is that it is virtually untapped by other real estate investors.<\/p>\n
Another option for locating divorce properties is contacting divorce lawyers. You can accumulate a list of such attorneys by logging on to www.superpages.com <\/em>and typing in \u201cdivorce attorneys,\u201d or by simply consulting your local Yellow Pages. Once your list of attorneys is established, approach them through a combination of letters (a sample of which is included at the end of this section) and phone calls. Inform them that you are a real estate investor who purchases homes for all cash and can close within 30 days. You might add that if they refer properties to you, you will give them a referral fee. The amount of the fee should depend on how good the deal is for you, but I generally pay attorneys from $2,000 to $5,000. It may seem like a lot, but it is well worth it. Trust me, when people know they will be compensated, they go out of their way to find you properties! Case in point: I am at the place in my business where I no longer look for properties; rather, people come to me with properties. All I do is go out and inspect them. It\u2019s truly a turn-key operation when it comes to locating properties. You can get to this point also; but it takes some time talking to people and letting them know what you do and that they will be rewarded with referral fees if they find you properties. So remember, ALWAYS offer people a referral fee; it is in your best interest, and theirs. When you do so, you will be exposed to more properties than you can possibly handle.<\/p>\nDivorce Letter<\/h3>\n
Dear Mr. and Mrs. <<HOMEOWNERS>>:<\/p>\n
While I was searching through the Divorce records of <<YOUR COUNTY>> county, I noticed that you had filed for divorce. I am very sorry to hear that the two of you were not able to work out your differences. The reason for my letter is to find out whether you are planning to sell your home. If so, I would really like to speak with you.<\/p>\n
We are a local real estate investment company interested in buying homes in your area. The condition of your property does not matter because we buy houses in any area or condition. We are able to settle quickly, usually WITHIN 15 DAYS!<\/p>\n
Please call me at <<YOUR TELEPHONE NUMBER>> and I will be more than happy to meet with you at your home and make you an offer for it. I look forward to hearing from you.<\/p>\n
Sincerely,<\/p>\n
<<YOUR NAME>><\/p>\n
Divorce Attorney Letter<\/h3>\n
Dear <<ATTORNEY\u2019S NAME>>:<\/p>\n
I am writing this letter to introduce myself. My name is <<YOUR NAME>> and the name of my company is <<COMPANY NAME>>. As I understand it, you are an attorney who handles divorce matters. I am sure you must represent many couples who are eager to get a divorce and as a result, want to liquidate their assets QUICKLY! That\u2019s where we can be of great assistance to you! We are a real estate investment company that by buys 1 to 4 family homes for ALL CASH\u00a0 in any area or condition! We are able to settle quickly, usually WITHIN 15 DAYS!<\/p>\n
Please call me at <<YOUR TELEPHONE NUMBER>> at your earliest convenience to discuss a mutually beneficial business arrangement. I look forward to hearing from you.<\/p>\n
Sincerely,<\/p>\n
<<YOUR NAME>><\/p>\n
PROBATE PROPERTIES<\/h2>\n
Your county\u2019s probate records offer another excellent source for locating distressed properties. As many real estate investors ignore this sector of the market, you stand to make amazing profits here. In my last probate deal, I bought the property for $65,000, put $20,000 in to repairs, and made $45,537.06 profit! The best part about it was that I purchased the property in March and resold it in May. How would you like to make $45,537.06 profit in two months on one property? Most people take a whole year to make that much.<\/p>\n
But just what are probate properties? Most people who own homes, particularly the ill or elderly, will establish a Will (Last Will and Testament) to assure that their property is given to those they wish it to be given to, upon their death. However, when someone who owns one or more homes dies, their property is not immediately <\/em>passed on to their heirs. Rather, law demands that an official court proceeding must occur in which proper heirs are established for the receipt of goods, according to the wishes of the deceased. This court proceeding is called \u2018probate.\u2019<\/p>\nDue to various factors, such as court backlog or bickering amongst heirs, probate often takes a year or more to finalize. This window of time, then, provides you with opportunity to discover properties which may be in process of probate. The best way to launch your exploration of this market is to visit your local Registry of Probate, which will be a part of your County Courthouse. This Registry lists all the probates in progress in your area, whether their estate includes real property, and will also specify the known heirs, and the executor\/executrix (the individual chosen by the deceased party before their death, or the court, to manage the deceased\u2019s Will) of those deceased individuals. With this vital information in tow, you now have two basic approaches you can use:<\/p>\n
1) You can contact the executor\/executrix, offering to relieve him\/her, as well as the heirs, of the burden of dealing with the property in probate. Just send them the sample letter I include below, explaining how you are willing to explore purchasing the property, and correspondingly, to offer them the simplicity of cash in place of the complexities of dealing with real estate; and<\/p>\n
2) If you discover that an attorney is handling the property in behalf of the heir(s), simply mail the attorney the effective letter I have also included below. As is my practice and should be yours, always offer financial incentive for the attorney to respond to your very generous business offer.<\/p>\n
Either way, because most people are inexperienced amateurs at handling real estate, real estate can be a real hassle for them. Further, heirs often have no emotional attachment to the property in question, and would rather be rid of the burden of maintaining it, paying property taxes, and possibly working with renters or caretakers.<\/p>\n
They are often eager to sell the property to get the burden off their backs and to place some of that burden in their pocket, in the form of cash. This is the key that opens the door to the service you can provide.<\/p>\n
Probate Letter<\/h3>\n
Dear <<EXECUTOR\/EXECUTRIX NAME>>:<\/p>\n
While I was searching through the Estate Notices of <<COUNTY NAME>> county, I noticed that you were handling the estate for <<DECEASED\u2019S NAME>>. I would like to take this opportunity to introduce myself. My name is <<YOUR NAME>> and the name of my company is <<YOUR COMPANY NAME>>. We are a local real estate investment company interested in buying homes in the deceased\u2019s area.<\/p>\n
The condition the property is in does not matter because we buy houses in any condition. We are able to settle quickly, usually WITHIN 15 DAYS. Call me and I will be happy to meet with you at the property and make you an offer for it.<\/p>\n
I look forward to speaking with you at your earliest convenience.<\/p>\n
Sincerely,<\/p>\n
<<YOUR NAME>><\/p>\n
Probate Attorney Letter<\/h3>\n
Dear <<ATTORNEY\u2019S NAME>>:<\/p>\n
I am writing this letter to introduce myself. My name is <<YOUR NAME>> and the name of my company is <<COMPANY NAME>>. As I understand it, you are an attorney who represents many descendants, and are in charge of liquidating their estates. You and I both know that most probates can prove to be big headaches. This being so, I want to let you know that I can be of GREAT ASSISTANCE TO YOU! We are a real estate investment company that buys 1 to 4 family homes in any area or condition for ALL CASH. We are able to settle quickly, usually WITHIN 15 DAYS!<\/p>\n
Please call me at <<YOUR TELEPHONE NUMBER>> at your earliest convenience to discuss a mutually beneficial business arrangement. I look forward to hearing from you.<\/p>\n
Sincerely,<\/p>\n
<<YOUR NAME>><\/p>\n
OUT-OF-STATE OWNERS<\/h2>\n
One of the best ways to identify profitable distressed properties is by locating out of- state homeowners. Why? Owning a home in another state can be one giant pain in the arse. Think about it. What if you owned a property outside your state and constantly received phone calls from your tenants about needed repairs? What if the house were abandoned and you were regularly notified of break-ins? Or what if the city of location keeps fining you for repairs? Would you be motivated to sell it? You better believe it!<\/p>\n
Many out-of-state homeowners are so motivated to sell their properties that they will sell far below market value. It\u2019s true! Not long ago an out-of-state homeowner called me, desperate for help. I asked her what was wrong. She said she had a 2 family that she needed to sell fast. She explained that her mother had fallen ill, and that she had moved down south in order to tend to her. When I asked if the property was occupied, she told me that it was currently abandoned. At once, dollar signs went racing through my head. I inquired of the property address, then went out and inspected it.<\/p>\n
Having worked in that geographic location before, I knew the market value of properties in the area for two families was between $140,000 and $180,000. Having determined that the property needed about $30,000 worth of repairs, I was thinking a great deal could be had, depending on the price she was willing to sell it for. Prior to calling her back I decided not to present an offer, but to ask her what she wants for the property. I always do this when I know a homeowner is desperate. When I called, she asked if I liked it. I told her it is not the type of property I am used to dealing with, but if the price were right, I would take it. She told me she wanted $60,000 for it. I replied that I would go ahead with the purchase, but for no more than $50,000. She agreed! I couldn\u2019t believe it was so easy! But you know why it was so easy? She was a desperate out-of-state homeowner. By the way, I ended-up assigning the contract to another investor for an $8,000 fee. Not bad for one-hour worth of work!<\/p>\n
The big question you are probably asking is, \u201cHow do I locate these out-of-state homeowners?\u201d Well, that\u2019s easy. Such homeowners are located through \u201cTax Assessment Roll\u201d books. These books are found through local real estate brokers. Real estate brokers use Tax Assessment Rolls to do basic farming of neighborhoods, and to check things such as property zoning and taxes. These books give you an immediate listing of all out-of-state homeowners.<\/p>\n
As you peruse these books to locate out-of-state homeowners, you will subsequently want to write them letters and\/or give them a phone call, asking if they want to sell their property. A sample of my \u201cout-of-state homeowner letter\u201d is included at the end of this section.<\/p>\n
If you cannot find a real estate broker who will let you use their books, you can acquire the books yourself through your local Board of Realtors or from your Tax Assessor\u2019s Office. These books are leased out each year, and cost about $100 per year for each county.<\/p>\n
If you do not want to spend the money to lease these books, I recommend looking through the tax book at your Tax Assessor\u2019s Office. This is the same book used to find owners of properties. Simply examine each page and write down the out-of-state addresses. Though this is time-consuming, it is also free!<\/p>\n
I can\u2019t tell you enough about how profitable it can be for you to locate out-of-state homeowners. 99% of real estate investors completely overlook this category of distressed property. But NOT you! Concentrating on just this one way of locating distressed properties can easily earn you a six figure income in no time. As I elaborated earlier, I made $8,000 on one property in one-hour simply by assigning the contract to another investor. It was that easy! You can do that too!<\/p>\n
REAL ESTATE AUCTIONS<\/h2>\n
Real estate auctions, more commonly called Sheriff\u2019s Sales, are one area of the distressed property business that I do not presently work. But because it is such a big part of the distressed property business, I have included this section for your benefit. Please keep in mind that before you go out and start bidding at a Sheriff\u2019s Sale, you must check title on the property. Just because a property is auctioned at a Sheriff\u2019s Sale does not mean that the property is free of all liens and encumbrances. In other words, it takes significant preparatory work to determine the status of a property before you should even bid on it. This is one reason I shy away from Sheriff\u2019s Sales. Another reason I do not work them is that they are very competitive. Consequently, in my opinion it is much safer and less competitive to purchase property in the pre-foreclosure period. But the choice is yours!<\/p>\n
Real estate auctions are the end result of someone\u2019s property undergoing foreclosure. For whatever reason, the property owner could not meet their mortgage obligations and the property was subsequently foreclosed by the lending institution. Put another way, the owner lost his rights to the property he pledged as security for the loan he used to purchase the property.<\/p>\n
As for working these auctions, there are several things, other than the above warnings, you should know. The auctions themselves are usually held at or near your local courthouse, or in some other equally central and accessible location. An auction referee will initiate the bidding on each respective property with a minimum bid, the amount of which is determined by the bank holding the property. Bidding normally goes quite quickly, the whole process being completed for a property in as little as three minutes. The point is, you need to be prepared. Arrive at the auction early, having done your homework to determine which properties are worth your effort, and precisely what price you are willing to pay and not exceed.<\/p>\n
You will likely have two types of competing bidders: people looking to purchase a home to live in, and pros who are looking to turn property into profit. Of these competitors, it will likely be only the pro you will have to concern yourself with. And when I say \u201cconcern yourself\u201d I mean it, as these individuals are often grizzled in and skilled at real estate auctions, to the point that if they notice a newcomer bidding on properties in their area, they might go out of their way to bid you up to a price they know to be too high, just to hurt you and eliminate you as a future competitor on their turf.<\/p>\n
Additionally, you will need to be financially prepared to even make the bids. Not\u00a0 only will you have to come up with cash for the total purchase price within 30 days of winning a bid, but in most cases\/states, will have to give 10% of the purchase price as a down payment immediately upon winning the bid! So unless you have extra cash on hand, working with a private investor who is willing to trust you with several thousand dollars of his cash may be the best way to meet these unique financial requirements<\/p>\n
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The easiest part of your business will be finding properties. Why?\u00a0 There are a great number of markets you can work. Distressed property comes in many forms, such as\u00a0 pre-foreclosures, REO or bank owned properties, real estate auctions, probate properties, properties whose owners are going through divorce, and abandoned properties.<\/p>\n","protected":false},"author":939,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"_links":{"self":[{"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/posts\/2183"}],"collection":[{"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/users\/939"}],"replies":[{"embeddable":true,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/comments?post=2183"}],"version-history":[{"count":8,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/posts\/2183\/revisions"}],"predecessor-version":[{"id":6133,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/posts\/2183\/revisions\/6133"}],"wp:attachment":[{"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/media?parent=2183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/categories?post=2183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/tags?post=2183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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