When it comes to real estate investing finding deals is an ever present need. This guest post from DealCollab shows us proven ways to find leads to solid real estate deals.
Four Types of Real Estate Leads for Investors
Every real estate deal starts with a lead whether it be from word of mouth or by generated leads as the ones offered by DealCollab. Having multiple sources of leads can greatly impact the success of your real estate investing and provide the results you are looking for.
Alternately you can still have a lot of success by choosing one source and develop a working process to maximize your results. Either way you choose it is smart to understand different sources for your real estate investing leads.
This article list four such sources of real estate leads for investors.
1. Pre-Foreclosures / Lis Pendens
A pre-foreclosure lead occurs at the initial phase of foreclosure proceedings. A “Lis Pen Dens” is the first document that is filed with the county court house that indicates the intent to conduct foreclosure proceedings against an individual or entity. You can search the court’s public records to find recently filed Lis Pendens or use a lead generation service as the one offered on DealCollab to find pre-foreclosure leads.
In a pre-foreclosure process the property owner is faced with losing their properties and must decide to sell the property real fast or arrange with the bank to stop the foreclosure proceedings. If this is not done, they stand to lose their property. As a real estate investor, the opportunity here is to contact the property owner and arrange to buy the property on terms that is both beneficial for you and the property owner. The foreclosure proceeding might be one of the most stressful experiences for a property owner so at all times the interest of the owner must be considered.
2. Foreclosure Auction
A foreclosure auction lead is a more advance stage of a pre-foreclosure lead. At this stage, the foreclosure proceedings have gone through the legal process and a judge has given a final judgement. In the final judgement, the court typically awards the plaintiff the amount they are foreclosing for plus any fees they may have incurred throughout the process. Lastly an auction date is set for the property to be sold. At this point, there is still time to contact the property owner and arrange to buy the property. If you are not able to contact the home owner, provided you have the cash to do so, you can purchase the property at the public auction. Often, the winning bids at a public auction are a below the after-repair value of the property.
REO leads occur after the foreclosure process has ran its course and the ownership of the property has transferred to the bank because it was not sold at the public auction. REO stands for Real Estate Owned, and in this case, it is typically owned by a bank or a financial entity. There still exist great opportunities with REOs as banks are really not in the business of owning real estate and want to sell these properties.
These properties are often offered at a discount of their market price. Do keep in mind that properties offered as REO sometimes needs substantial amount of repairs so you will need to factor that in your purchase price. Most banks will have a section on their website where they list their REOs.
4. Tax Deed Auctions
As with a foreclosure auction, properties are also sold at public auctions for unpaid taxes. As for the opportunity here, the same applies as with foreclosures. You can contact the property owner and arrange to buy the property at a fair price. If you are not able to contact the property owner or work out a purchasing price with the owner, you can purchase the property if it proceeds to the auction date.
If the property makes it to the auction date then it is sold by the county court at a public auction either online or at the courthouse location. Properties purchased at the auction often needs repair and are sold at below after-repair market value. You should make it your responsibility to conduct adequate research on the property and drive to look at it, If the property owner is there they might also agree to show you the inside. If the property you are considering is very far from you, consider using a Proxy Visit service as is provided by DealCollab.