More Spying Techniques to Getting Your Deals Funded and Closed

In my previous posts,

I’ve discussed the importance, the downright musts to flipping on your Real Estate spy cap. Pretty much the same way that Superman did in the phone booth.

Now, what I’m about to show you is top-secret stuff that will peeve many investors off, as it will exploit their exact methods to doing deals.

Have you noticed in the past several years all of the ads offering you lists of foreclosed houses and that you can buy these homes at deep discounts at foreclosure auctions? Many of these will also advertise cars, homes, planes, and boats. I remember thinking as a teenager, “if we could just be in the know on some these auctions”. Well, let me tell you these auctions are no longer a secret. If you attend one of these foreclosure auctions, you’ll see exactly what I’m talking about. Most people are in the know about the auctions, yet they are unaware of what I’ll be showing you here. Now, most of these lists are a complete waste of time and money as you’ll be in the know when it’s too late.

First off, every deed and mortgage is a matter of public record. In case you didn’t realize this, it’s all recorded at your County Recorders office or at your Count Courthouse. For a list of these courthouses, go to http://www.netronline.com and get the address and phone number for your area.

Next, make a personal visit to your county recorder’s office. You’ll want to ask the clerk where they store all of the deeds and mortgages. They will carry you in a room full of these thick books all filled with mortgages, judgments, deeds, and other property information.

Now I want you to conduct a search for the last 90-120 days of the foreclosure deeds. Many courthouses have search functions on their computers now that allow you to see these documents.

Anyway, just invest the time by doing this research. You’ll notice several lending institutions where they foreclosed on properties. If you’ll pay close attention, you’ll be able to see who bought that property at the courthouse steps.

This will do 2 things. First it will let you know if there is a market that you can tap into by chasing deals that are in pre-foreclosure status (that’s foreclosure pending before the foreclosure auction), plus that lets you know who the real players are in the industry.

At a typical foreclosure auction, you’ll see several types of people there such as:

1. The investor: He’s the real deal. Maybe he’s an older gentleman that buys up everything he can get his hands on. My advice is to never get into a bidding war with this guy, cause he will take you to the cleaners.

2. The wannabe investor. This person is usually the shy type as he’s read every investing book known to man, yet never takes any action.

3. Neighbors. They want to see who’s buying the property.

4. The attorney. The attorney will be the one conducting the foreclosure auction.

5. The homeowners. Yes, even sometimes the homeowners show up at the sale to see what it went for.

I have a very good friend that noticed a quad-plex in our market was up for foreclosure in a few weeks, so he drive out to take a look. My friend was serious about buying this property and was willing to make a deal with the owner. So he called the realtor that was listed on the sign in yard. However, the realtor was a real deal killer in this situation. He said, “this property isn’t going to foreclosure, that’s crazy, my seller want even look at an offer less than $110K.”

My friend had already done the research and knew the mortgage against the property was only $67K, so he decided to wait. As luck would have it, he was the only one that showed up at the auction, except for the realtor and the owner that was getting foreclosed on. He, then made it a point to introduce himself to the realtor that had told him a couple of weeks before that it would never go to foreclosure.

Now, here’s something else for you to do while you’re at the courthouse. Just take a day off from work or whatever and go. It will be worth the time you’re investing for research. Anyway, look at the assignments of mortgages. As you go through these assignments, you’ll see many big name banks assigning to other big name banks. Avoid these, but pay special attention to the assignments from the Big Bank to the small investors. These may be company names like XYZ Investments LLC or John Doe Trust Account or something like this. See, many times, banks will sell notes to private investors for a fraction of their value. And guess what? These investors have CASH and they’re interested in passive investments secured real estate. Do you understand how valuable this information is?

So, I want you to ponder, what can you do with this information?

Well, this can help serve two areas for your business. First, if someone is buying at foreclosure auctions, then they have cash or access to cash and are always looking for a good deal. So, this could be a good start for a possible buyers list if you market to them.
Next, the investors that buy assignments are more interested in making a high yield on their money. They want to be more of a passive investor. Well, there will be a time when you need private money for a deal and if you’ve marketed to these people to build a relationship with them, then you’ll have no problems finding the money.

Now, what you do to get your foot in the door with these people? I don’t believe in calling them, I’d prefer to market to them by direct mail with several letters introducing yourself and what you do. Also, if you know some are buying at the auctions, then show up and introduce yourself, without coming across as a threat to their business.

Here, I’ve given you two ways to find sources to solve two of the biggest issues among real estate investors in finding funding for your deals and building a list of potential buyers. Now, go figure out who’s doing what and get to know them, you’ll be glad you did.