Pre-Foreclosure Investing | Million-Dollar Strategy

Let’s discuss the “Pre-Foreclosure” strategy.

First, we will discuss the investing strategy.

Next, we will discuss the numbers and how to potentially earn 1-million dollars with this strategy.

Then, you get some actionable steps to take for this strategy.

Lastly, you get one Resource to consider, which may be helpful to you.

This article will explain how you can generate income with pre-foreclosure investing, legitimate ways to consider activating a pre-foreclosure real estate business, as well as answer some questions that you may have about this topic.

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Okay Let’s Rock…

Pre-foreclosure investing is near and dear to my heart. That’s because it was one of the big factors for helping me move out of my old single wide mobile home back in the 1990’s and into a brand-new house.

One of the reasons I was able to do that was because I connected with struggling homeowners that were behind on their loan payments.

I was able to connect with them because I could relate with their financial struggles because I was struggling financially too. That gave me EMPATHY.

Please realize, you do NOT have to have a foreclosure crisis in the real estate market for people to be experiencing their own personal financial crisis.

As real estate investors, it should be our goal to build a connection with distressed homeowners in an ethical and caring way. Once we begin building this relationship, we can ask questions in the hopes we can find out what the REAL problem is.

There is a BIGGER PROBLEM that’s causing distressed homeowners to lose their house in the first place. The Family’s facing Pre-Foreclosure right now have a financial challenge in their life, one that is causing the Pre-Foreclosure.

But this financial problem often doesn’t go away after their house has been sold or lost to the back. This financial problem often stays with these families even after they move from their house.

Once we know what that is, we can find out what the homeowner feels will be the SOLUTION that will help them right now.

With that understanding, we can design a purchase contract that is a win-win-win…

Good for the homeowner. Good for you. Good for your exit strategy.

Potential 1-million-dollar roadmap #1:

Flip the CONTRACT.

If the property will take some work to get into sale condition, you may choose this option.

Day 1 Lesson discussed Real Estate Wholesaling.

Once you have found out what real estate wholesaler’s buying criteria is in your area, you can consider the deal TERMS to see if they will meet the criteria of your wholesale buyers.

Determine what your “minimum wholesale fee” will be.

This might help you expedite your 1-million-dollar roadmap from the Day #1 Lesson of this course, “Real Estate Wholesaling”.

Potential 1-million-dollar roadmap #2:

Sell the property yourself to a retail buyer.

If the property is in saleable condition…

If the property won’t take much to get in good sales condition, you may want to offer it for a slight discount to get it sold FASTER for a HIGHER PROFIT than selling the contract to a wholesaler.

Determine what your “minimum acceptable profit” will be.

Buy low – Sell low. That is one formula for a fast profit.

Potential 1-million-dollar roadmap #3:

If the property will take some work to get into rental condition…

Implement the BRRRR Method.

BRRRR is an acronym for:

Buy Rehab Rent Refinance Repeat

If the house is in an area you feel good about that has the potential for ongoing demand and possible appreciation, you may want to keep the house for your rental portfolio.

Determine what your “minimum acceptable profit” will be.

Potential 1-million-dollar roadmap #4:

If the property won’t take much work to get into rental condition…

You may want to keep it for your own rental house portfolio and long-term wealth creation. More on that in the lesson on Day 7.

Determine what your “minimum acceptable profit” will be.

Obviously there will be different variables for each house, repairs needed, financing on the property, payments in arrears, late fees and penalties, etc.

Let’s keep it simple for this exercise and say you are only choosing pre-foreclosure houses to sell to retail buyers that will provide you with a minimum $30,000 profit.

5-Year Plan To 1 Million: 11.11 deals per year 1 deal per month -1

3-Year Plan To 1 Million: 11.11 deals per year 1 deal per month -1

1-Year Plan To 1 Million: 33.33 deals per year 3 deals per month -3

Of course, if you choose to go after higher price ranges, you may uncover higher equity levels. These larger equity deals may result in higher profits which would reduce the timeframe for this 1-million-dollar goal example.

Here are some actionable steps to take for this strategy:

Learn how to find distressed pre-foreclosure homeowners’ scenarios so you can uncover motivated home sellers.
Find investor-friendly short-term financing so you can close deals and get the deed. Or, if the property has favorable terms with a low interest rate, learn how to acquire the property Subject-To the underlying financing and get the deed to the property that way. Remember, TERMS have VALUE!
Create your essential relationships so you can implement any of the potential 1-million-dollar roadmap strategies: Wholesale Flip: Find active wholesalers in your area and find out what their buying criteria are. Retail Flip: Find a good real estate agent that can sell your house affordably for TOP DOLLAR fast. (Or consider selling a little lower than fair market value to find more buyers if the market is a bit slower so you can sell, get your profit, and move on to the next deal.) BRRRR Method: Find contractors you trust who can do the work ON TIME and within your budget.
Work on practicing your negotiation skills so you can create win-win-win deals.

Helpful Resource:

In order to be successful with this “Pre-Foreclosure” strategy…

I believe you need a way to authentically HELP distressed, struggling homeowners…

Whether you do the deal with them or not.

This “marketing positioning” actually helps YOU rise to the surface, so these homeowners see that you are DIFFERENT from the other investors out there.

I put together a Free Pre-Foreclosure Investing WORKSHOP that shows you EXACTLY how to do that.

Click here to watch my Pre-Foreclosure Investing WORKSHOP.

You will never wonder how to effectively connect and win over motivated home sellers (BEFORE you ever meet or talk to them) again.

Remember, whatever you are trying to accomplish, I know YOU can do it!

Mark Walters 3rd generation real estate investor