It is no small matter to deal with a family who is losing their home, especially if the property has been home to them for a number of years. A displaced family is a family experiencing fear and turmoil. Tim contends that stepping into such a scenario is not for the faint of heart, nor for the calloused. “Dealing in foreclosures is not a game,” Tim points out, “but is serious business. And those who take it seriously are those who are successful in their endeavors.”
It’s certainly no secret that family is in trouble when it comes to being behind on mortgage payments. There are many solutions to offer, some of which the home owner may not even be aware. The real estate investor who has a working knowledge of these solutions can turn a lot of deals and build a solid business.
Pre-foreclosures refer to properties that are in the default phase of foreclosure. The bank has filed foreclosure papers but the sheriff sale (where the bank auctions off the property) has yet to take place.
Are the sellers motivated? Some will say “Yes, of course.” But realize that people in turmoil are also often in denial. They are thinking “this just can’t happen to me,” which presents yet another challenge to the investor working with pre-foreclosures. This means they are not at all motivated – even though common sense says they should be.
Tim encourages investors to become familiar with methods of reaching those who are in these precarious situations. The investor who understands pre-foreclosures and the short sale systems are prepared to offer the best solutions. And when the correct approach is used, the homeowners will listen.
Never promise what cannot be delivered. If and when that happens (and word travels fast) a reputation can be ruined with one bad deal. Instead Tim encourages investors to be as honest and forthright as possible, even if the news is not good for that family. The more people you help, the more glowing testimonies you will receive; and the more your pre-foreclosure real estate investing business will grow and prosper.
Too many real estate investor wannabes are jumping into the business of pre-foreclosures without proper preparation, and soon find themselves in over their heads. They hurt themselves, their own families and often the families who are facing the foreclosure. No one wins in that scenario.
“If the motive is to help people,” Tim says, “rather than only to make a quick profit, you will succeed. And it becomes a win-win situation for everyone.”