Profiting From Real Estate Foreclosures

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Real estate investors regularly seek out foreclosure properties to profit from, but there are certain strategies they use to find the perfect properties that are tailored to their needs and that meet their investment goals. I will share these strategies with you here, so you too can enjoy nice profits!

If you’re unsure of what a foreclosure is, a foreclosure is simply a legal process used by a lender, in which the lender can seize or sell a person’s property in order to recover a debt that had been attached to that property.

Use Automated Marketing to Find Foreclosures and Pre-Foreclosures

Successful and skill real estate investors save time and energy by setting up a system that allows pre-screened deals to come to them automatically. These are deals that fit their real estate investment criteria and put little effort into finding.

This is done through direct response marketing. Direct response marketing is a type of marketing created to get a direct response that is specific to their needs.

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This strategy also allows you to find opportunities before a foreclosure happens and buy the property(s), allowing the property owner to pay off their loan, avoid foreclosure, and save their credit score. This strategy will work in any market, although you’ll find an even greater amount of success with this strategy in down markets.

In the next three steps I’ll explain to you in detail how to use this strategy and profit from it.

Step One: Use Finder Ads

You can use direct marketing to create finder ads that’ll bring qualified prospects directly to you. First create a finder ad(s) — which can be classified ads, flyers, yard signs, mailers, business cards, and even online ads such as advertising on Google (online ads can be cost effective).

Finder Ads Should Include the Following:

  1. It has an interesting and targeted headline
  2. It makes the audience want to know more
  3. It makes a promise to reader/listener
  4. Lastly, it tells the them what action(s) to take

These ads should target people who are looking for a way to avoid foreclosure (possibly by trying to sell their property). They’re looking for answers and they’ll want fast solutions. You want the finder ad to address your audience’s needs, but more importantly their emotions!

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Step Two: Offer Support and Valuable Advice

You don’t want to come off as an investor who is only looking for a great deal, this is not the type of person these people are looking for. Instead, you want them to believe you’re truly interested in helping them and to offer solutions to fix their problem.

Create a phone number they can call that has a prerecorded message and outlines solutions that are available to them and actions they can take. People facing foreclosure are in very emotional states and are often embarased to speak about their situations. They’ll feel more comfortable calling a number with a recorded message knowing they won’t have to speak to a live person.

Your Recorded Message Should Include:

  • Actual solutions to prevent foreclosure.
  • An understanding of how severe their situation is.
  • A message that gains the callers trust.
  • It screens out deals that do not fit your real estate investment criteria.
  • You end up with a handful of great deals to choose from.
  • That you might be able to purchase their property, if the other solutions mentioned won’t work for them.

Step Three: Get Rid of Emotional Barriers

The finder ads that you’ve created will direct callers to a free 24-hour informational recorded message. The main purpose of the recorded message is to screen out deals that don’t fit your investing criteria, allowing you to spend time only on deals you truly want.

Remember people are very emotional in this state and they have no interest taking to someone only wanting to make a profit. Your finder ad should make them feel as though you’re there to help them.

Recorded messages make it easier for people to call because:

  • They know they won’t have to talk to a real person.
  • They know they won’t be pressured into anything.
  • The number to call is free, so anyone looking for solutions are likely to dial.

To screen out bad deals, questions such as these need to be answered:

    • Amount owed on mortgage? Amount of payments missed?
    • Properties location? If it’s a building or home seek answers to questions such the properties age and square footage?
    • Properties condition?
    • Appraisal value?
    • Have they received an additional expense list from the bank that is owed to them in the foreclosure process?
    • Have they received a “Notice of Sheriff’s Sale”?

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Don’t Forget the Internet!

The internet is also a get tool for direct marketing. You can send people to a website that has the same information as your recorded message. After they’re on your website, you can give them an option to sign up for more information with their email address, which you use an auto-responder that sends them helpful information periodically and allows them to remember that you’re there to help shall they need it.

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Terms You Should Know

  • Right of Reinstatement: This gives the homeowners the right to avoid foreclosure during this period of time by paying any overdue amounts owed and making the loan payments current after the notice of default has been recorded.
  • Cure Date: This is the last date possible for anything owed to be paid and made current. The property owner normally has no longer than a couple of days before the property’s sale to do this. (When the property owner cannot pay the past due amounts, generally the foreclosed property will be sold at a trustee sale or real estate action).
  • Deficiency Judgment: These are issued by the lender if the loan is higher than what the property is worth. If this happens, the owner gets their property taken away and is also responsible for paying the remaining amount of the loan (the difference of what the house was sold for at auction and the amount remaining on the loan).


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