Moms and Dads Real Estate Investors trying to Profit from Foreclosures! Stage one, the delinquency phase is the time to structure a deal.
Coming across a homeowner willing to liquidate the property at this stage is priceless. I say this for 2 specific reasons...
(1) Partnership: There's a lot of external pressure on the homeowner(s) at this time. The home loan lender is calling, and most likely so are other creditors. The environment in the home is very challenging for everyone. If you are in a position to bring a "SOLUTION" to the homeowners problems. You place yourself in a very favorable position. Always remember "foreclosure is an emotional process" to deal with from a homeowners perspective. Partnering with the homeowner(s) to solve their problem is where you want to be. As a partner you are someone they can trust, someone who is honest in their dealings, compassionate, and professional. The best win/ win deals are created here in my opinion. Having worked to structure many foreclosure purchases for my investor clients, I have seen the stage one strategy work many of times. This is the best way to ensure you get the deal.
(2) Lack of Competition. When a person is trying to Profit from Foreclosures! Speed is very important. I remember back in 1997, the ultimate deal that got away from me because of my fear of moving forward. I was so afraid that I would make a mistake that I literally made the mistake of taking my time. I read a quote once that says " you can't steal second base in slow motion". After losing my deal, believe me I understood that quote very well. I often drive past that home on Oakland Avenue just to remind myself of what non-action can do. Anyways, when you deal in stage one, the delinquency phase, you do not face much competition from fellow investors. Trust me in Foreclosure Deals there is no honor amongst investors, each man or woman for themselves. I am not writing from a fairy tale story. I am writing from in the trenches. I have counted money that was taken at the last moment by some slick talking investor who got a tip that the house I was working on was in play. This is in the trenches talk. Oops, I am rambling again- sorry.
When you have a homeowner partnering with you. They are more likely working with just you. They may have gotten your information from a trusted friend of theirs. However, when stage two comes into play. The flood gates open and your homeowner will have more investors coming at them, like an A rated celebrity has paparazzi on Oscar night, and everyone wants to get that one perfect shot.
Your homeowner will begin to get mail solicitations, phone solicitations, and investors just showing up at the door. Remember "foreclosure is an emotional process", and with your homeowner meeting all these new investors with their solutions. Well, let's just say, you begin to move down the totem pole. With each new investor singing to the choir, your homeowner starts to hesitate on moving forward with your deal even if it is the best solution. Do not take this personal. The homeowner is only seeking what they perceive to be the best "SOLUTION" for them.
Now can you understand why I say stage one is the best stage to create win/ win solutions? So go for it, and remember "You can't steal second base in slow motion".