Last week, I told you about a Pasadena real estate investment seminar I attended at the local library. The meeting which was two hours was really a precursor to get you to pony up for the more expensive full day seminar. Real estate is a great career; however it’s dependent upon the individual to chart their own strategy for career growth and development. There is a world of educational opportunities out there, but most of them are fee based, and your attendance is predicated upon you writing the check, not your company. If I am going to invest a full day and miss my daughter’s soccer game, I need to be impressed.
This seminar was held on Saturday from 9-6 and the topic centered on buying property in foreclosure. Any property, including property where the Notice of Default has been filed, short sale properties, or REO’s, this course provided information and strategy to acquire these distressed properties with as little money as possible from your pocket.
Usually when you hear “Buy Property with No Money Down” or “I was able to buy this house that appraised for $350,000 for $5000″ you are skeptical. And rightly so, since we all have been conditioned to hear “If it’s too good to be true, it probably is”. However this seminar presented several different options for addressing several current market opportunities.
Real Estate Market Conditions
The underlying premise that makes this strategy successful can be attributed to a couple of things:
- There is a tremendous inventory of distressed property on the market and all indications are there is more to come
- Banks do not want to be in the position of taking property back and having to hold on to it.
Given those circumstances, it’s not necessarily the day after Christmas sale at Macy’s, but you can see the banks do have an interest in disposing of their non-performing assets, as these only serve to weigh heavily on their balance sheets.
Finding Distressed Properties
The seminar provided all of the steps involved in foreclosure and the time line. It was also reported that banks are taking up to 5 months to actually file a “Notice of Default” Once it’s filed, it provides the property owner with 3 month notification of an upcoming “Trustee Sale”, unless the debt and increasing expenses are cured. If not, then a “Notice of Trustee Sale” is filed giving the owner another 21 days until the sale takes place at public auction.
As they say in life, “timing is everything”, and it is during this window the optimum opportunity takes place. Okay, now that you know the process, how do you go about finding these properties? The instructor covered several scenarios and tactics for prospecting and speaking with owners. Homeowners many times do not know what to do or how to react to these types of situations. They need someone to help guide them and offer solutions to a troubling situation. This presents an opportunity for a win/win solution.
From a personal standpoint, I like to know all of the ins and outs before I venture into something and while this course offered many rosy scenarios and makes it sound very easy, there are potential pitfalls. That’s why I would recommend you seek expert advice on any deal you attempt to put together and have someone on your side who can offer professional assistance. There may be a reason the instructor is also an attorney. The real estate transaction offers the opportunity to be very litigious, and the law does provide certain benefits to a homeowner in foreclosure. Appearing in court is probably not the best use of your time.
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