Foreclosure is the result of past due payments on a mortgage. If you lapse in mortgage payments to your lender, the lender will take the necessary steps to get their money – by selling the house.


To profit by buying a foreclosure , you need to educate yourself before attempting to buy a foreclosure property. There are many classes, seminars, books, and websites that have valuable information.


Research the local tenant/landlord laws regarding defaulting on payment and eviction processes. Find out if there are rent controls in your area. Foreclosure law is created and managed at the state level. It is in your best interest to learn about your state’s laws regarding foreclosures.


Some states have deeds of trust, others have mortgages. State of Florida has mortgages.


There are three phases of foreclosure.


1. The pre-foreclosure phase:The homeowner, missing two or three months of payments will start the foreclosure process moving. After another 4-6 weeks, the case is handled over to the lender’s attorney, who will send additional letters, and set a cure date. The cure date is the last date that the property owner can settle payment before the property goes up for sale at a

foreclosure auction. Short Sale is often done during this period.


  1. 2.The auction of a foreclosure: Public auction


  3. 3.The post-foreclosure phase: Sometimes Bank wins auction and becomes a seller of Bank Owned Property


Remember that the primary interest of the lender is for money, not property.To make money on foreclosures, you need to be involved in the process before they public learns about them. The public usually learns about foreclosure property when it is announced in the newspaper.


You will have more leverage the earlier you involve yourself in the process.Leverage is the ability to take a little money and use it to do large scale things.You have the ability to create a win-win situation for the property owner, yourself,and the lender. The property owner will get out of an embarrassing situation and help protect their credit, you will make money, and the lender will get paid.

BUYING FORECLOSURE

If you decide to buy foreclosure property by going to an auction, consider these tips:


1. Attend a few auctions to just watch the process before you actually plan to bid.

2. Do your homework about what you should bid before you go to auction.

The lender will start the bidding with the amount that includes the foreclosed mortgage balance, taxes, liens, fees, etc. You bid needs to be at least this much, but less than the market value so you can make a profit.

3.Know the rights that you, and the original property owners, have under your state’s laws.

4. Find in out in advance if bidding is through sealed written offers, or if it is verbal.

5. Find out how much money is needed up front and what the schedule of

payments will be for the remainder.

6.Your bidding strategy should be to bid based on the mortgage balance. In the current FL market, a lot of times mortgage balance is more than market value, and banks are letting properties go for much less than mortgage balance. Don’t get yourself discouraged with high mortgage balance.

7.Don’t fall into the trap of bidding based on market value or you might over

bid. Have definite amount you like to pay for the property before you go to auction.

Tips for Buying Foreclosure Property at Auction

How can you find foreclosures?

We have all heard the saying, “the early bird gets the worm.” This theory stands true when investing in real estate, too. How do you get the inside scoop on real

estate investments?


1. Look for newspaper real estate listings that say either “For Sale by Owner” (also called FSBO), or something like, “Must sell, all offers considered.”

2. Find out the owner’s contact information on properties that appear to be abandoned, and call them.

3. Research probate court cases that involve divorces, deaths, and business failures to determine if there is real estate left on the table.

4. Contact relocation companies and title insurance companies to ask for real estate referrals.

5. Act on the foreclosures listed in the newspaper.

6. Watch the lis pendens or Notice of Default filings at the country courthouse or the Clerk’s Office. You can either do this yourself, hire a college student to do it for you, or buy them from a list service. The first two ways give the highest returns usually, because the list service has a large distribution list.

7. Internet real estate services. Try www.therealestatelibrary.com as a starting point.

8. If you want to buy your primary residence, look into HUD and VA. Their websites have links to government-linked sellers of repossessed homes.

9. Find out about investment clubs in your area.

10. Open accounts at area banks. Network with the bankers and lenders,because they handle mortgages, loans, and are in contact with property owners in financial distress.

11. Focus on real estate agencies. When home owners know foreclosure is eminent, they usually contact an agent to try and sell the property on their own. Let area agents know you are a real estate investor.

1 2. Become a licensed real estate agent, and create a niche in foreclosure properties.

1 3. Contact law offices that specialize in real estate law, because they are the ones that distressed homeowners contact at the beginning of foreclosure proceedings. Although attorneys can’t disclose information because clients are protected by a code of ethics, the attorney can keep your business cards for referrals.

14.Market yourself by posting an ad in the newspaper of the area you want to buy in. Make up flyers and post them on public boards, car windows, and canvas the neighborhood, looking for people considering selling their home.

15.Ask builders and contractors if they have any leads on prospective sellers.

RIEKO NIIZATO tel: 727-421-1273 email: rieko@usrealtyinc.com

Copyright © 2009 US Realty Inc. All rights reserved.

External Link for Foreclosure Properties

NEW: Current list of foreclosure properties (click on the pdf file below.  Right click and choose ‘save as’ to download.)


Foreclosures - Bank Owned Properties 01-1.pdf