What can I do with foreclosures?

Question

Hello Everyone I'm new to Real Estate, and ive been hearing different ones talk about investing Foreclosures. What kind of investing can I do with them? Can I wholesale them? How? Whats the process? Any information would be greatly appreciated?

Will Barnard · Answer

No question that wholesaling REO/SS deals are more complicated. If you can market direct to motivated sellers, you can have an easier go at it, but you must spend cash on marketing, be consistent, and have people skills.

What is the most cost effective means? You can speak with five different people and get five different answers. Any threads on that topic too!

Rob Gillespie · Answer

Marlon,
My experience has been exhausting dealing with foreclosures. In the "pre" stage, you can try to work out either a short sale or a loan mod, but either way you are at the mercy of the bank and the owners. It quickly turns into a numbers game where you throw a lot against the wall and see what sticks. 
If you are buying REO's, my experience has been a bidding war between investors with a bank that seems like they could care less if they sell or not. 
So in a nutshell, I like simple owner to buyer transactions that everyone wants to deal and there is not a ton of paperwork and negotiations involved. Just my 2 cents. 
Good luck on whatever path you choose.

Josh R. · Answer

The most cost efficient depends on how much you value your time. If you have a small marketing budget then you are looking at handwriting your own yellow letters.

If you can commit to a larger budget then you can outsource this task to any number of yellow letter companies.

Do a search for direct mail here on BP and just start reading everything you can. Then come back and ask any specific questions that have not already been addressed (or you cannot find the answer)

Marlon Dugar · Answer

Thanks Carolina, Whats the most cost efficient way to do direct-mail marketing?

Carolina E. · Answer

Hi Marlon Dugar you can find motivated sellers by sending out letters to certain target homes it post a "we buy houses" ad in the paper. Like Will suggested, start reading the articles here on bp. These are only a few ways of many to find leads.

Marlon Dugar · Answer

Thanks Will, I will Do. I'm just so excited about getting started! Another thing is, my city has a sign ordinance that doesnt allow bandit signs. How can I get good wholesale leads?

Will Barnard · Answer

By foreclosures, if you mean REO properties (Bank owned), thne you can do any number of things. Wholesale, buy and hold, buy, fix and flip.
Wholesaling an REO is a tad more difficult due to the no assignment clause banks have in their addendums. I would advise you to start reading the wholesaling forums if that is your interest. A lot of this and more is talked about in fine detail.