It benefits both the distressed homeowners and the foreclosure investor if the investor buys his house. The biggest benefit of buying a house at preforeclosure stage is that you can prevent the owner from losing his property to his creditors and you will also acquire a very affordable property whose value is way under the market value. You can also gain profit from this preforclosure home that you will buy if you assign the contract to another investor, or if you have it renovated and sole, or use it as a rental property.
So how do we find preforeclosure properties to invest in. Real estate leads can be found in three sources.
The first thing to do is to check out your county clerk or recorder’s office. Public records list down transactions between homeowners and their lenders. One a homeowner misses one payment, the lender will give him an official notice called the NOD or lis pendens. You can actually get a copy of this list of notices by paying a certain amount which depends on where you live. These are just notices but it does not contain any contact information on the homeowners with preforclosure properties. And since there are a lot of documents to check out, you should be ready to spend some amount of time to check them out. The foreclosure leads are found here but you need to spend time on research.
You can also ask for a list of preforeclosure properties form a mortgage broker. You can be referred by the local mortgage broker as a free source to distressed homeowners. Distressed homeowners try to get their loans modified or refinanced by the mortgage owner but they are unable to do so. The only option left then to these distressed owners is to sell their homes fast.
These homeowners need honest counseling and guidance because they are not really familiar with foreclosure processes. You can give the owner a fresh start by offering to purchase their house.
You can also find preforclosure homes in an online preforeclosure database. If you use an online foreclosure database, you can easily get leads on preforeclosure properties. The online service that you will use should be a reliable one. An online foreclosure database should list preforclosure properties. If you search for preforeclosure properties in some online sites, you will not find any results with preforeclosure properties. However, there are online foreclosure websites that actually list preforclosure all over the country, including the pay off, equity, attorney handling the case and many others. The online foreclosure system is fast, easy and accurate. It can generate 20 to 30 leads per month which can give you great properties to buy at way under market value.