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Increased Opportunities for Foreclosure Investors

Posted by 15789465 on

Although the economy seems to be (slowly) getting better, we're going to see an increase in foreclosures soon.  There are three major reasons:
  1. Many people "held on" as long as they could, but just can't do it anymore. They've tapped out their retirement funds, sold all the "toys,"  quit the private clubs and borrowed everything possible from relatives.  Winter has lasted too long, and even though Spring is around the corner, there's no food left.
  2. The re-default rate of loan modifications is now topping 50%.  We'll see that climb, ending in the inevitable foreclosure.
  3. Cash is coming out of the woodwork to invest in real estate. Prices are low enough that investors feel they can buy with confidence. They can SEE that better times are coming, and they have the cash to take advantage of record low prices. This emboldens lenders, who are more willing to foreclose because they anticipate a ready market for the ORE.
If you haven't started yet, now is the time to get into foreclosure investing.  Got time, but no cash? Get it from partners, or transaction lenders.  Got cash but no time? Find the people who have time but not cash.  How do you find each other?  I'm reminded of an article in GQ years ago. The title was: "How to find women."  The advice: "Read women's magazine articles about where to find men. Go there."

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  • Hi Howard—Home Depot is the men’s store. Women prefer Lowes. Pretty distinct marketing differences between the two. Who knew the home improvement stores had gender identities?

    Tax sale litigation and bankruptcy reminds me of the old IBM exec story. An IBM exec made a $5 million mistake on a deal. IBM had to eat it. The exec tendered his resignation to the Senior VP. The Senior VP refused to accept it. He said, “I just spent $5 million training you, and you want to quit on me NOW??”

    Believe it or not, investors respond to people who say they’ve been through the ringer and learned the ropes the hard way. (not to mix my metaphors overly much). You know how to put deals together. You know how to analyze them. You are what bankers call “the sponsor.” Every deal needs a sponsor and a money man. Usually they are not the same people. Usually the sponsor has no big money of his/her own. Everybody knows that and is cool with it. If I were Howard Ross, I’d start talking to investor groups, doctors, and other high net worth individuals. From what I know about you, your investments were good, you just got surprised by some court decisions in tax sale areas where there had been absolutely no prior judicial guidance.

    The other major avenue for you is buying pre-foreclosures subject to the mortgage. Lenders are approving these deals, so there is no worry about the due on sale clause.
    Good luck!

    deniselevans on
  • one magazine advised women to go to home depot.

    but women complained that only guys like howie were usually there.

    since i’ve had to go bankrupt due to tax-sale lawsuits, i’d love to know more about how i can use other people’s money to buy property at mortgage foreclosure sales.

    howard ross on

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