Ralph R. Roberts - Foreclosure Investing For Dummies

You’re dedicated to developing mutually beneficial solutions. I hate to see “investors” ripping off homeowners, and I’d really hate to see anyone use the information in this book to take advantage of distressed homeowners. You can earn plenty of money investing in foreclosures by acting with integrity and presenting reasonable solutions that meet the needs of all parties involved.

You’re able to treat foreclosure investing as business. Understand that you’re not the cause of the homeowners’ distress. More than likely, you can’t solve their problems. Very likely, many others have tried to help the homeowners solve the root cause of the problem (and failed) before you came along. What you can offer are truth and useful information. You must be empathetic without jumping in to save a drowning family that may drag you under both financially and emotionally.

Keep in mind that a real problem is something that money can’t fix, such as an untreatable illness or a death in the family. Most families, if they choose to, can move on after experiencing a financial calamity. Foreclosure isn’t the end of the world, although at the time, homeowners may perceive it to be.

Throughout this book, I’ve sprinkled icons in the margins to cue you in on different types of information that call out for your attention. Here are the icons you’ll see and a brief description of each.

I want you to remember everything you read in this book, but if you can’t quite do that, remember the important points I flag with this icon.

Tips provide insider insight from behind the scenes. When you’re looking for a better, faster, cheaper way to do something, check out these tips.

“Whoa!” This icon appears when you need to be extra-vigilant or seek professional help before moving forward.

In addition to the priceless information and guidance you’ll find in the nearly 400 pages of this book, you can access the Foreclosure Investing For Dummies Cheat Sheet online. Just go to www.dummies.com , and enter “Foreclosure Investing For Dummies Cheat Sheet” in the search box. The Cheat Sheet includes a complete checklist of everything you should have before you bid or make an offer on a foreclosure property, step-by-step instructions for buying properties in pre-foreclosure, step-by-step instructions for buying properties at foreclosure auctions, a list of foreclosure auction websites, and a list of the ten most common mistakes to avoid when investing in foreclosure properties.

Foreclosure Investing For Dummies is constructed in a way that’s similar to the foreclosure process itself. It presents you with opportunities and with information to capitalize on those opportunities in three key entry points in the foreclosure process: pre-foreclosure, foreclosure, and post-foreclosure.

For a quick course on foreclosure investing, check out Chapter 1, which provides an overview of the foreclosure process along with some tidbits on how to profit from the various stages of the process. Skip to Chapter 3, where I guide you in selecting your preferred entry point. The chapters in Part 2are indispensable in preparing you for a successful investment venture. If you choose to invest in pre-foreclosures, skip to Part 3, were you discover how to research properties and deal directly with homeowners. Part 3also contains a chapter ( Chapter 8) that’s essential for all foreclosure investors: properly researching a property. If you’re interested in purchasing properties at auction or after they’ve been repossessed, Part 4provides all the information you need to know. And when you’re ready to cash out on your investment, skip to Part 5.

In a few chapters, I include fill-in-the-blank forms and worksheets. Although you can fill them out in the book, consider making copies to write on. These forms and worksheets are indispensable for gathering research data, evaluating properties, and presenting options to homeowners facing foreclosure.

Part 1

IN THIS PART …

Get up to speed on finding, researching, bidding on, buying, and selling foreclosure properties at all stages of the foreclosure process, from pre-foreclosure to post-sale.

Tell the difference between judicial and nonjudicial foreclosure, and figure out which approach your state follows.

Identify the different stages of the foreclosure process, and discover the benefits and drawbacks of opportunities for acquiring properties at each stage.

Find profitable opportunities by connecting directly with homeowners in pre-foreclosure; wheeling and dealing when foreclosure notices are posted; bidding at auctions; or buying properties after a foreclosure sale from banks, government agencies, and other investors.

Chapter 1

IN THIS CHAPTER

Taking a bird’s-eye view of the foreclosure process

Building a team of advisers, investors, and assistants

Gathering critical data about properties and their owners

Buying and taking possession of a foreclosure property

Realizing your profit at the end

Whenever you’re developing a new skill, having an overview of what’s involved provides you a framework for understanding. In the case of investing in foreclosures, that framework must include the basics of the foreclosure process, the importance of having a strong team, the benefits of thoroughly researching properties, and a general idea of the different ways to realize your profit (because selling isn’t the only option).

A general knowledge of the foreclosure process and the rules and regulations that govern it can reveal opportunities for purchasing properties below market value. Understanding the necessity of having a strong investment team in place enables you to begin thinking about the people who would be best qualified to assist you. Realizing the benefits of thorough research can prevent you from buying a property that’s destined to send you to the poorhouse. And knowing your options for extracting equity from a property enables you to optimize your overall investment strategy.

In this chapter, I provide an overview of the foreclosure process, stress the necessity of building a competent investment team, introduce you to essential property research techniques and resources, briefly explain the process of buying and taking possession of properties, and touch on various options you have to cash out your profit when you own the property. In a nutshell, I give you a framework for investing in foreclosed properties. As you proceed through the book and gain experience, you’ll develop a deeper and more detailed understanding.