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Ralph R. Roberts. Foreclosure Investing For Dummies
Foreclosure Investing For Dummies® To view this book's Cheat Sheet, simply go to www.dummies.com and search for “Foreclosure Investing For Dummies Cheat Sheet” in the Search box. Table of Contents
List of Illustrations
Guide
Pages
Introduction
About This Book
Foolish Assumptions
Icons Used in This Book
Beyond the Book
Where to Go from Here
Prepping Yourself for Foreclosure Success
Wrapping Your Brain around Foreclosure Investing
Investigating the Foreclosure Process from Start to Finish
Picking Your Point of Entry
Scooping other investors during the pre-auction stage
Bidding on properties at foreclosure auctions
Buying properties after the sale
Assembling a Team of Experts and Advisers
Getting Your Financial Ducks in a Row
Finding Foreclosures and Seized Properties
Performing Your Due Diligence
Investigating the property’s title and other documentation
Inspecting the property with your own eyes
Guesstimating a property's true value
Investigating the situation and the homeowners
Setting and Sticking To Your Maximum Bid
Taking Possession of the Property
Completing the essential paperwork
Paying property taxes and insurance
Persuading the current residents to move on
Cashing Out: Realizing Your Profit
Repairing and renovating the property to maximize its value
Marketing and selling to get top dollar
Cashing out equity by refinancing
Profiting in other ways
Getting Up to Speed on the Foreclosure Process
Identifying the Foreclosure Process in Your Area
Foreclosure by trustee sale
Foreclosure by judicial sale
Exploring the Missed-Payment Notice Stage
Getting Serious: The Notice of Default
Proceeding to the Foreclosure Sale
Halting the Foreclosure Process
A SMOOTH OPERATOR
Reinstating the mortgage
Requesting and receiving a forbearance
Mortgage modification or repayment plan
Filing for bankruptcy
Agreeing to a deed in lieu of foreclosure
Getting one last chance during the redemption period
LOSING OUT ON A JUNIOR LIEN
Finalizing the Foreclosure: Ushering the Previous Owners Out the Door
PUTTING SOME EMPATHY IN EVICTION
Picking Your Point of Entry in the Foreclosure Process
Dipping In at the Pre-Auction Stage
Exploring the pros and cons of pre-auction foreclosures
Guiding homeowners to good decisions
A TYPICAL DAY IN THE FORECLOSURE OFFICE
Dealing with anger and angst
Assessing your ability to deal with pre-auction scenarios
Pursuing Foreclosure Notices
Knowing the benefits of waiting for the foreclosure notice
Weighing the drawbacks of waiting for the foreclosure notice
Wrapping up your deal before the sale
Bidding for a Property at a Foreclosure Auction
STANDING AFAR FROM THE MADDENING CROWD
Weighing the pros and cons of buying at auctions
Setting a maximum bid well in advance
Putting on your poker face
Acquiring Properties after the Auction
Scoping out REO properties
Finding and buying government properties
Buying properties from other investors
Waiting Out the Redemption Period — If Necessary
Laying the Groundwork for Maximized Profit and Minimized Risk
Building a Powerful Foreclosure Investment Team
Lawyering Up with a Real Estate Attorney
Teaming Up with a Good Moneyman or Woman
Consulting a Title Company to Cover Your Back
Hiring a Tax-Savvy Accountant
Lining Up a Home Inspector
Contacting Contractors and Subcontractors
Hiring a general contractor — or not
Tracking down top-notch contractors and subcontractors
Contracting with contractors and subcontractors
MY CONTRACTOR WENT AWOL!
Finding skilled and unskilled help
Insuring your helping hands
Selling Your Property for Top Dollar through a Seller’s Agent
SELLER’S AGENT VERSUS BUYER’S AGENT
Recognizing the value of a seller’s agent
Picking an agent with the right stuff
Assessing the Pros and Cons of Partnerships
Filling Your Foreclosure Tank with Financial Fuel
Estimating Your Cash Needs
Finding a Cash Stash: Knowing Your Financing Options
Financing with Hard-Money and Gap Loans
Weighing the pros and cons of hard money
Making up the difference with a gap loan
Finding private lenders
Partnering with Investors
Shaking Your Piggy Bank: Tapping Your Own Resources
Examining the pros and cons of using your own money
Totaling your sources of investment capital
Counting your money in savings
Unlocking the equity in your home
Maxing out your credit cards
Tapping into your retirement savings with a self-directed IRA
Planning for contingencies
Financing Your Venture with Conventional Loans
Exploring conventional loan types
Making yourself look good on paper
Determining what you’re worth in dollars and cents
Obtaining your credit report
Examining your credit reports
Boosting your credit score
Gathering the paperwork and records you need
Comparison Shopping for Low-Cost Loans
Networking Your Way to Foreclosure Success
Grasping the Power of Networking
Generating leads on profitable pre-auction properties
DISCOVERING OPPORTUNITIES IN DIVORCE
Securing your financing
Tracking down reliable, affordable professionals
Selling your house for more money in less time
Realizing the Importance of Being Good
Acting with integrity — always
Investing in quality craftsmanship
Building thriving communities
Marketing Yourself
Gathering your marketing tools
Designing and printing business cards
Carrying your phone at all times and answering it
Equipping yourself with a computer
Creating ads
Starting with your inner circle
Keeping in touch: A daily chore
Managing Contact Information
Rewarding Good Deeds and Good Leads
Creating Win–Win Situations in Pre-Foreclosure (Before Auction)
Discovering Homeowners Facing Foreclosure
Networking Your Way to Promising Properties
Identifying your personal lead generators
DEALING WITH AN EMBARRASSING SITUATION
Creating your A-list
Contacting friends, family, and neighbors
Building on your church affiliations
Networking through clubs and other organizations
Getting the word out on the streets
Scoping Out the Neighborhood for Dontwanners
Searching for FSBO Properties
Finding Foreclosure Notices
Tracking down local publications
Getting on the mailing list
Subscribing to commercial foreclosure information services … or not
Deciphering a foreclosure notice
Teaming Up with Attorneys to Help Distressed Clients Sell Their Homes
Acquiring properties in probate
Finding properties in probate
Buying properties in probate: Navigating the process
Adopting homes orphaned by divorce
Finding properties orphaned by divorce
Buying properties from divorcees
Teaming up with bankruptcy attorneys
Performing Your Due Diligence
Collecting Essential Information about the Property
Honing your title acquisition and reading skills
Picking up details from the foreclosure notice
Digging up details at the Register of Deeds office
Finding the property
THE CHICKEN MAN
Obtaining the property’s title and other key documents
Researching the property’s title
PROTECTING YOURSELF AGAINST MORTGAGE FRAUD
Gathering information from the mortgage and note
Uncovering facts about any additional liens
Uncovering unpaid property taxes and other tax liens
Gathering tax information at the assessor’s office
Getting your hands on the property worksheet
Gathering additional information
Doing Your Fieldwork: Inspecting the Property
Doing a drive-by, walk-around inspection
Snapping some photos
Assembling Your Property Dossier: A Checklist
Recognizing the Most Common and Serious Red Flags and Big Mistakes
Contacting the Homeowners and Lenders
Scheduling Your Foreclosure Activities
AVOIDING LEGAL BROUHAHAS: IGNORANCE IS NO EXCUSE
Contacting the Homeowners Directly
Tracking down the homeowners
Kicking off your mail campaign
Delivering a letter of introduction
Delivering follow-up letters
Congratulating the homeowners
Getting in touch over the phone
Adding the Homeowners’ Profile to Your Property Dossier
Presenting All Available Options
CONVINCING THE HOMEOWNERS TO SEEK HELP
Reinstating the loan
Negotiating with the lenders for a forbearance
Refinancing the mortgage
Listing the property
Selling short
Accepting your cash offer
Refinancing through you
Selling the home and leasing it with an option to buy it back later
Selling the home and leasing it without an option to buy
Giving a deed in lieu of foreclosure
Filing for bankruptcy
Waiting (and saving) during redemption
Doing nothing
Getting Inside to Take a Look Around
Contacting the Lenders
Contacting the senior lienholder
Contacting the junior lienholders
Analyzing the Deal and Presenting Your Offer
Completing the Deal Analysis Worksheet
Calculating the homeowners’ equity in the property
Guesstimating the “as is” market value
Calculating the amount owed on the property
Calculating your top cash offer
Logging the loan status
Determining options based on LTV
Assessing the homeowners’ credit health
Gauging the homeowners’ wants
Determining the homeowners’ gross monthly income
Assessing the Homeowners’ Options
Presenting Your Offer: The Purchase Agreement
Closing Time
Finding and Buying Foreclosure and Bankruptcy Properties
Bidding for Properties at a Foreclosure Sale
Tracking Down Auction Dates, Times, and Places
Preparing Your Maximum Bid
Guesstimating the property’s improved value
Estimating repair and renovation costs
Figuring in holding costs
Subtracting agent commissions and closing costs
Arriving at your maximum bid amount
SNAGGING A DIAMOND IN THE ROUGH
Bidding at a Foreclosure Auction
THE BIDDER AND THE GOVERNOR
Packing for an auction
Sitting in on a few auctions
Crafting a winning bidding strategy
Submitting sealed bids
TOYING WITH THE COMPETITION
Playing the Role of Backup Buyer
SCORING A BACKUP-BID WIN
Following Up After the Auction
FRUITLESS LABOR FROM A FAILURE TO FOLLOW THROUGH
Buying Repos: Bank Foreclosures and REO Properties
Acknowledging the Drawbacks of REO Opportunities
Getting Up to Speed on the REO Process
Shaking the Bushes for REO Properties
Positioning yourself as an attractive investor
Connecting with REO brokers
Getting connected with REO A-listers
THE EXCLUSIVE REO INSIDERS CLUB
Tracking the property through the REO stage
Working your way to the better deals
Following up with homeowners during redemption
Inspecting the Property
Timing Your Offer for Optimum Results
Acting quickly after the auction
Timing your move with the redemption period
Tuning in to the lender's fiscal calendar
THE CROOKED BROKER
Waiting for the broker to list the house
Pitching an Attractive Offer
Sizing up the lender's needs
Reevaluating your needs
HAGGLING WITH REO MANAGERS
Putting your offer in writing
Closing on the deal
Finding and Buying Government Repos
WHY IS THE GOVERNMENT IN THE REAL ESTATE BUSINESS, ANYWAY?
Bargain Hunting for HUD Homes
Weighing the pros and cons of HUD homes
Hooking up with a HUD-approved agent
Finding HUD homes online
Finding and Buying VA Repos
Profiting from Fannie Mae and Freddie Mac Properties
Tapping into Freddie Mac’s home clearinghouse
Shopping for Fannie Mae properties
Buying FDIC properties
Finding and Buying Government-Seized Properties
Buying properties at tax sales
HOUSEJACKING IN WAYNE COUNTY
Avoiding the tax lien sales gurus
Buying properties from the IRS
Contacting your county treasurer’s office
Taking a trip to the state department of transportation
Finding government-seized property online
Banking on Bankruptcies
Brushing Up on Bankruptcy Laws
Selling assets through Chapter 7 bankruptcy
Restructuring debt through Chapter 13 bankruptcy
THE VALUE OF A GOOD ATTORNEY
Knowing When to Purchase
Tracking Down Houses in Bankruptcy
Skimming publications for bankruptcy notices
Researching bankruptcy filings
Networking with the gatekeepers
Dealing with the Gatekeepers
Cooperating with bankruptcy trustees
Teaming up with bankruptcy attorneys
Getting the homeowners on your side
Getting the creditors on your side
Dealing with Bankruptcy Delays on a House You Bought
PLAYING NICE WITH THE SHARKS
Sampling Some Other Foreclosure Strategies
Negotiating Short Sales
Knowing the lienholder pecking order
Wheeling and dealing with lienholders
Recognizing a short-sale opportunity
Teaming up with the homeowners
Gathering payoff amounts
Crunching the numbers
Negotiating with the lienholders
Notifying the IRS first
Dealing with first-mortgage lenders
Contacting construction lienholders
Contacting other major lenders
Buying and Selling Junior Liens
Buying junior liens to foreclose for a quick payday
WITNESSING A TRAIN WRECK
Buying seconds to protect the first mortgage
Selling a junior lien for a profit
Profiting from Property Tax Sales
Tracking down property tax sales
Finding golden tax sale opportunities
Buying tax deeds and tax certificates
Getting redeemed out of your position
Profiting from the tax lien or deed
Cashing Out Your Profit … After the Sale
Assisting the Previous Homeowners Out the Door
Tying Up the Loose Ends after the Purchase
Closing on a pre-auction purchase
Tying up the loose ends after the auction
Protecting Your Investment through Redemption
Maintaining the property’s status quo
Securing the property
Keeping hungry investors at bay
Contacting the homeowners after the sale
ACTING WITH INTEGRITY
Offering cash for keys … and a non-redemption certificate
Planning Repairs and Renovations
Evicting the Residents When Time Runs Out
Repairing and Renovating Your Investment Property
Choosing a Renovation Strategy
Planning Repairs and Renovations
Calculating the return on your investment
Roughing out your budget and schedule
Giving Your Property a Quick Makeover
Freshen the exterior
Gussy up the interior
Tidy up the kitchen
Scour the bathrooms
Spiff up the bedrooms
Make the basement tolerable
Attend to the mechanicals
Investing in High-Profile Rooms: Kitchens and Baths
Cooking up a remodeled kitchen
Giving the kitchen an affordable facelift
Gutting the kitchen
Modernizing kitchen appliances
Updating the bathrooms
Adding Valuable Features
Cashing Out: Selling or Leasing Your Property
Selling Through a Qualified Real Estate Agent
Selling faster for a higher price
Choosing a top-notch seller’s agent
Staging Your House for a Successful Showing
Jazzing up the front entrance
Decluttering the joint
Adding a few tasteful furnishings
Appealing to the senses
Generating Interest Through Savvy Marketing
Negotiating Offers and Counteroffers
Comparing offers
STEERING CLEAR OF “CASH BACK AT CLOSING” DEALS
Mastering the art of counteroffers
Closing the Deal
Becoming a Landlord
Checking Out Other Cash-Out Strategies
Refinancing to Cash Out the Equity
Reselling the Property to the Previous Owners or Their Family
Reselling to the previous owners
EQUITY STRIPPING: DON’T DO IT!
Financing the buyback through insurance-policy proceeds and other means
LIFE-SAVING LIFE INSURANCE
Leasing the Property to the Foreclosed-on Homeowners
Offering a Lease-Option Agreement
REPEATING THE SAME MISTAKE
Assigning Your Position to a Junior Lienholder
TAKING ADVANTAGE OF YOUR POSITION
The Part of Tens
Ten Common Beginner Blunders
Having Insufficient Funds on Hand
Overestimating a Property's Value
Underestimating Your Holding Costs
Overbidding in the Heat of Battle
Failing to Investigate the Title
Failing to Inspect the Property with Your Own Eyes
Bidding on a Second Mortgage or Junior Lien
Renovating a Property before You Own It
Trusting What the Homeowners Tell You
Getting Greedy
Ten Ways to Maximize Future Leads by Acting with Integrity
Stopping the Bleeding: Providing Basic Financial Advice
Assisting Homeowners in Their Job Search
Suggesting That the Homeowners Seek Help from Family and Friends
Encouraging the Homeowners to Contact Their Lenders … and Soon
Suggesting Short Sales and Other Debt Negotiations
Assisting Homeowners in Assessing Their Refinance Options
Suggesting the Option of Selling the House before Foreclosure
Bringing Up the Bankruptcy Option
Offering a Helping Hand
Revealing the Option to Walk Away
Ten Tips for Avoiding Common Foreclosure Minefields
Steer Clear of Foreclosure Investment Scams
Research the Title Yourself
Inspect the Property with Your Own Eyes
Know What You're Bidding On
Set Realistic Goals
Muffle Your Emotions
Invest with Integrity
Anticipate Delays
Foresee Unforeseen Expenses
Deal with the Blame and Guilt
Foreclosure Rules and Regulations for the 50 States
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Index. A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
R
S
T
U
V
W
Y
About the Authors
Dedication
Author's Acknowledgments
WILEY END USER LICENSE AGREEMENT
