Insider Tips, Strategies and Insights to: • Supplement Your Income • Seek Out Troubled Properties • Eliminate Problem Properties
Foreclosed properties are the best opportunity for you to find a great home for yourself, to lease out as rental property or to serve as an investment for years to come. Denise Evans reveals a lifetime of insider tips, strategies and insights critical for anyone with the desire to buy foreclosure properties honorably and fairly.
How to Make Money on Foreclosures provides dozens of proven tools that really work to make you money.
Includes Exclusive Worksheets and Samples, such as: • Property Evaluators • Sample Ads and Flyers • Letters to Potential Sellers • Inspection Checklists • Profit vs. Cash Flow Evaluator • Lender Packets • Potential Seller Interview Sheet • Comparable Homes Worksheet • Repair Expense Calculator • Referral Letter • Real Estate Contract Explainer • And much, much more
Unless some lender violates its customer’s privacy, you generally won’t be able to find troubled properties before they become public knowledge. The trick, then, is for those borrowers to find you. You want to generate prospects by making yourself easy to find.
There are three efficient and economical ways for people to find you:
1. word-of-mouth referrers (your fan club);
2. seminars and newsletters; and,
3. targeted advertising—small yard signs, etc.
Get to Those Who Need You
Word of mouth might not bring you the most inquiries, but it will bring you the most business. That’s because word of mouth generally carries with it an implied recommendation, so the borrower is already predisposed to believe you can help him or her. Unfortunately, if you’re just starting out in buying foreclosures, you don’t yet enjoy any word-of-mouth reputation.
Seminars and newsletters let you promote yourself without sounding really obvious about it. The recipients of your efforts pay attention because they have a problem, or know someone who has a problem. As a result, they’re predisposed to seek help, but you still have to convince them you’re the person who can deliver.
If you’re a people-person and can comfortably speak in front of groups, then a seminar is the best vehicle for you. If you enjoy meeting with people, but don’t like public speaking, then you can create a meet the expert seminar-type function. Someone else introduces you and then people mill about, eat cookies, and drink punch while you wander around and just talk. If you’re not comfortable with either one of these, then go with the newsletter or informative article route.
Some people will learn enough from you to avoid foreclosure. That’s okay—it’s a positive result for you. Every seminar attendee or newsletter subscriber who’s able to learn from you and solve their own problems is a powerful and motivated referrer totally convinced of your credibility and value.
Sadly, most people, for emotional or other reasons, will not be able to implement the advice you give them. Those people will become your pre-foreclosure customers.
The most calls, the fewest prospects, and the biggest expense, will come from advertising. That’s because most of your advertising-related calls will be from people who are merely curious, or who are only days away from losing their property. Also, you must work really hard to differentiate yourself from all the other pre-foreclosure advertisers, some of whom operate on a nationwide level.
Enlist the Lender
The first person to learn that a loan is headed towards foreclosure is the lender. You’d think the borrower would know first, when he or she fails to make the monthly payments, but borrowers are generally very optimistic people. They expect a miracle to happen, and everything will then be rosy. The lender knows better. But bankers have very strict privacy laws, and can’t go around discussing past-due accounts.
This is not to say that you shouldn’t talk to lenders. It just means that you must rely on two separate sales jobs. You must sell the lender on the idea that you can help. Then, you must rely on the lender to sell the borrower on the idea that you can help. You want the lender to encourage the borrower to contact you. Why would they do this? Because banks do not want real estate. They call it the owned real estate, or sometimes ORE, or even sometimes REO (real estate-owned) portfolio. It is a lot of work for the bank to own, insure, maintain, and generally fool with real estate they never intended to own in the first place.
Table of Contents
Introduction Chapter 1: Choose to Be a Hero Become a Professional Help Others Your First Steps Meet Jim Chapter 2: Learn to Talk the Talk Instant Credibility Income Stream Land Due Diligence Property Types Commercial Flipping Chapter 3: Buy a Property for Your Personal Residence Evaluate What You Want Screen Your Choices Determine if You Can Afford It Chapter 4: Decide What You Want in Investment Property Do you want to immediately supplement your income? Do you want to concentrate on building future income? Do you want the equivalent of a savings account? Do you want to buy and sell properties fairly rapidly? Put the Tools in Practice The Bottom Line Chapter 5: The Inside Scoop on Real Estate Loans Individuals Financial Institutions Governmental Sources Institutional Lenders The Paperwork Grading the Property Owner Chapter 6: When Good Loans Go Bad Loans in Securitized Pools Work the Workout Department The Bank’s Prepwork Chapter 7: Find Troubled Properties, Early Get to Those Who Need You Enlist the Lender Sample Letters to Create Name Recognition Other Groups of Referrers Seminars Lead Services and Advertising Sample Ads Promoting Your Services Other Ways to Find Distressed Properties Sample Contact Letter Chapter 8: Find Borrowers from Public Notices Ask for Help Torrens Lis Pendens Court Actions Nonjudicial Foreclosure States The Notice Chapter 9: Eliminate Potential Problems, Quickly Make the Easy Cuts Going to Round Two Chapter 10: Interview the Borrower The Initial Contact Before the First Meeting The First Meeting Make the Meeting a Success When You Can’t Help Chapter 11: Legal and Practical Due Diligence Priority of Liens Sample Estoppel Letter Buying a Lien Search Title Insurance Doing a Lien Search Yourself Chapter 12: Estimate Fair Market Value Calculate a Value Profile of Comparable Homes Comparable Home Sales Analysis Chapter 13: Rental Properties and Cash Flow On Paper Profit vs. Cash Flow NOI and Cash Flow Chapter 14: Additional Costs to Factor into Your Planning Property Acquisition Expenses Closing Costs Calculate Closing Costs Holding Costs of Investment Property The Fixer-Upper Repair Calculation Worksheet Sales Cost Put the Pieces Together Chapter 15: Structure a Deal with the Borrower California and Consumer Protections No-Equity Asset Purchase Equity Purchase Value of Equity Worksheet Equity Repurchase Equity Repurchase Worksheet Chapter 16: Structure a Deal with the Lender Maximize Assets and Income Minimize Risk and Expenses Protect Themselves Chapter 17: Go to Foreclosure Sales Practice First Go to Sales The Anxious Lender After the Auction Redemption Rights Possible Changes Deficiencies Chapter 18: Buy after Foreclosure Local Lenders’ ORE Departments Property Magazine Following Up on Foreclosure Notices Government Foreclosures Property Search at Courthouse Chapter 19: What Happens after the Purchase I won’t have anyplace else to live. I can’t...
About the Author
Denise L. Evans received her law degree from the University of Alabama Law School, with a concentration in real estate, tax, and finance. While a law student, she served on the Board of Editors for the Journal of the Legal Profession, published two scholarly articles, was Director of the Legal Research Department, and clerked with a law firm that had a large real estate practice. She graduated at the top of her class, earning the prestigious Henderson M. Somerville Prize. Afterwards, she spent several years in Houston, Texas in commercial litigation, much of it real estate-related. At the pinnacle of her legal career, she headed a specialized department of eight litigation attorneys and support staff, and conducted legal training for lawyers throughout south Texas.
Today, she is a successful business woman in a variety of real estate-related businesses, including one which she sold several years ago for a profit of several million dollars. She is a licensed commercial real estate broker with a very active practice. She has twenty years of experience in conducting seminars, consulting, and passing on her secrets and insights to other people, as well as successfully implementing them herself. Ms. Evans has implemented, tested, and proven all of the concepts in How to Make Money on Foreclosures.
Never content to rest on her laurels, she applied for, and was accepted as, a candidate for the coveted CCIM (Certified Commercial Investment Member) designation. Ms. Evans serves on the finance committee of the Birmingham chapter of CREW (Commercial Real Estate Women) and is a research associate for the Alabama Real Estate Research and Education Center at the University of Alabama. She organized a very successful merchants’ association for her part of town, and serves as President.
She resides with her husband, two Chinese Pugs, a German Shepherd, half a million honey bees (really!) and assorted wildlife on forty acres of relatively blissful peace on Lake Tuscaloosa, in Alabama.
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How to Make Money on Foreclosures
by Denise L. Evans
