Getting a Head Start

EquityBuild Real Estate Investing NewsCertainly one of the most significant activities in the world of real estate investing is finding the right property. Whether the potential property will be held for long term appreciation and a boost to monthly cash flow or the investment will be flipped within a matter of weeks, finding the next opportunity is indeed the Holy Grail.

There are several, proven methods employed when finding real estate opportunities from using a scout or an agent to scouring public records. In fact, there certainly is no need to reinvent any real estate investment wheel when searching for the next project. Simply follow the footsteps of other successful investors.

The Path

For example, finding foreclosures is a simple, yet effective way to identify potential flips. Distressed homeowners can come in several varieties, and for those that are falling behind with their mortgage payment, foreclosures provide an excellent opportunity for the active real estate investor. But it’s essential to understand the timeline of a foreclosure filing and the legal steps lenders must take when a borrower fails to make payments on time. Knowing this timeline can give you a head start, as much as 30 days, against other investors who mine the foreclosure market.

Mortgage payments are typically due on the first of every month. When a borrower misses the initial payment date, not a lot goes on other than the payment is delayed. On the 15th, if the payment is not yet made, a late fee may be applied. Still, the mortgage company sees nothing wrong. If the borrower misses the next payment as well, the mortgage company begins to get a little nervous; the borrower has missed two payments in a row.

This is where the legal wheels begin to turn. When two payments in a row are missed, the mortgage company sends a certified letter to the owner, called a Notice of Default, or NOD. This notice spells out the amount past due as well as informing the borrower that if three payments in a row are missed, then a foreclosure may be filed.

It’s Public

Once a foreclosure is filed, it becomes a public record. Real estate investors who target foreclosures gather this information from the county in which the foreclosure was filed. This filing is open to anyone and lists the name and contact information of the delinquent borrower and can be obtained by physically visiting the county office holding the foreclosure filings or paying someone a fee to gather the data for you.

Getting the Jump

EquityBuild - Finding Your Real Estate Investing NicheYet here’s the opportunity: the Notice of Default. Remember, the NOD is also a public record filed at the very same location where the foreclosure listing resides and is filed at least 30 days earlier than the foreclosure notice.

If you invest in foreclosures or are considering the process, if you pay attention to the NOD filing you’re in a position to contact the distressed homeowner at least a month before investors who only review foreclosure filings. Yes, most borrowers with an NOD do indeed get caught up on their payments and avoid a foreclosure.

However, if finding a potential property before anyone else can is valuable to you, and it should be, search for the NODs as well as foreclosure filings. It’s good to get a head start.

by, Sydny Cohen: EquityBuild News Editor