Having a home enter foreclosure can be the worst thing for a homeowner and the best thing for somebody who is looking to buy a home.
There are more homes in foreclosure out there than you might expect. In June of 2023, there were over 35,000 homes in some part of the foreclosure process.
If you are a real estate investor, you may be looking for homes that are in this stage. What you need to do is learn how to find pre-foreclosure leads.
Any decent real estate investor in your area is also likely looking for homes that are in foreclosure. Having real estate leads for homes just before they enter foreclosure could give you a huge advantage.
What do you need to do to get these leads? This guide gives you some tips.
The first thing that you need to do is decide what location you want to invest in. You could limit yourself to a certain area if you insist on being close enough that you can travel to the house daily.
Or, you may have your heart set on a certain city that you believe is going to rise in value soon.
Let's say that you are looking for a home in the Los Angeles area. In that situation, you may decide to focus your search on houses within a 10-mile radius of downtown Los Angeles.
By doing this, you have created a guide that allows you to determine the maximum distance you are willing to invest for a home.
You can also expand this search and look for homes within a certain state. Depending on the size of your state, this can either narrow your search down significantly or it can give you more flexible options.
A smaller state such as New Jersey can give you an exact idea of where you want to invest, like near Philadelphia or New York City. As for California, you have options as far south as San Diego to options north of San Francisco.
Use this information wisely to determine what area you are looking to invest in.
Depending on what state your ideal house is in, it may have a different foreclosure process. It is up to you to research how that works in each state.
However, there are typically general rules about the process that you should be aware of.
In some circumstances, the foreclosure process can take as little as six months from the time the first missed mortgage payment happens up until the eviction process begins. However, it can take longer in other states. This can even take years if a homeowner had a foreclosure process affected by the pandemic.
What you need to do is find out what the estimated timeline is for the foreclosure process in the state that you want to invest in. Then, you will get an idea of how much time you have to work before an auction occurs in these circumstances.
For example, let's say that it takes three months of missed mortgage payments before a house gets a Notice of Default. You can try to find out which homeowners are behind on their mortgage payments in this situation. To make it easier on yourself, you can even try to look for homeowners who just recently received a Notice of Default.
That is early enough in the foreclosure process that you can offer the homeowner an alternative solution before they lose their home, with nothing to show for it. You need to know how much time you have to work with there and start acting on the process quickly.
If you aren’t having any luck finding this information on your own or you realize that it is taking too much time, there is another solution for you. You can buy real estate leads for homeowners that are in this exact situation.
What you need to do is look for a resource like us, a company that sells lists of real estate leads. When you target a certain demographic, you are more likely to find a list of leads that fit your needs.
In this situation, you are looking for leads that are anxious to sell their home to avoid foreclosure. This would fall under the Motivated Sellers category.
What that means is that the homeowners on this lead list have a lot of incentive to sell their homes. While not all of those leads are going to be for financial reasons, this is the most likely list you should use to find what you are looking for.
Having a list like this can save you a significant amount of time looking for leads like this yourself.
These are just some of the tips that you can use to learn how to find pre-foreclosure leads. When it comes to leads like this, you want to try to stay ahead of the curve. That means finding homeowners looking to sell before they make it too deep into the foreclosure process.
What you need to do is focus on a location, be aware of local foreclosure procedures, and be open to buying real estate leads.
To learn more about how to find pre-foreclosure leads fill out our contact form to get in touch with our real estate leads experts, schedule a meeting, or call us at (402) 235-4556.