The key to pre-foreclosure profits is encouraging motivated homeowners to contact you. This is easier said than done. Now I am not a psychologist; however, you will more than likely have to deal with people that are trapped in a typical grief cycle. The various stages of this cycle include: shock, denial, anger, bargaining, depression, testing, and finally acceptance. In other words these people will typically try to avoid the inevitable. Your only hope is to be able to catch them when they finally accept the fact that there are people like you that can help them.
A lot of people have different techniques that they utilize to reach out to distressed homeowners. Some people believe that you should knock on doors. This may work; but keep in mind that some very unhappy people might confront you. Further more, how many people do you think would be willing to invite a complete stranger into their home to talk about their financial problems? Other people will tell you that you should try to call the property owner. Cold-calling tends to have a low success rate because many owners have had their phone service shut off, abandoned their property or refuse to answer the phone. I believe that the best way to reach homeowners facing foreclosure is a well-organized direct mail campaign.
One of the resources that I recommend that you purchase is a book called The Pre-Foreclosure Property Investor's Kit by Thomas Lucier. This book details the systems you will need to put in place to create a successful direct mail campaign. Lucier also provides you will several great sample letters. You can use these letters to make contact with property owners in foreclosure as soon as their lender's notice of lis pendens or notice of default is recorded and becomes public information.
 One of the keys to success is mailing out follow-up letters at regular intervals. Once you have your system in place, I recommend that you use The United States Postal Service online resource http://www.usps.com/. You will see that this service has a 'Direct Mail' feature. This feature allows you to integrate Direct Mail into your foreclosure marketing campaign. Benefits of this system are that it is relatively cheap, very professional, quick, and effective.
The sample letters that Lucier provides are very direct and right to the point. Your letter should convey the following points:
- I want to buy your house today
- I will give you a cashier's check within five business days for your house.
- I will handle all of the details of the sale of your house
- I will help you find another place to live
In order to make this system work you will need to keep track of the letters you send out. Consistency and persistence are essential. Just like any other marketing campaign...this is a numbers game. You may have to mail out 100 letters to get 5 responses. But just think, if you are able to buy just one or two properties you have a chance to make a profit of $15,000 to $20,000 per deal! |
