Just recently, I attended a foreclosure sale in my area that was literally packed full of other investors. I'm sure it's pretty much the same in your area. The home being foreclosed on was worth an estimated $35K in it's as is condition.
It was amazing to see the bidding start out at $20K and itch its way upward and end at over $50K. And what was scary was some of these investors bidding didn't know if the foreclosing bank was a first mortgage or a second!
That's the first sign of a disaster. If you're going to bid at the auction, then you should do your homework and know what you're bidding on and what position the lien was in. It's not a pleasant experience to win a foreclosure auction, only to find a superior lien that has to be paid off before you can sell. That's never happened to me because I've always done my due diligence.
Now, some of these guys get way too emotionally involved in the bidding process and lose all reason for buying at the foreclosure sale which was to get a deal at a deep discount. And that was exactly what happened in this instance.
Anyway, what do you make of a foreclosure sale that happens this way? You invested your time to attend and the bidding has gotten out of hand, so what do you do next?
Do you take part in the bidding war? Or sit back and have a gripe session about the situation?
I think not.
See, this is an excellent opportunity to get to know others with deep pockets. Simply observe what's going on around you and network to get to know the other guys bidding, because these investors are an excellent source for private money or to flip your deals to.
Where else can you find targeted, pre qualified buyers for your deals?
First, you know these investors that are bidding are interested in real estate or else they wouldn't be there bidding. Next, you know that they have cash or access to cash. So, if you deal with them, then more than likely funding wouldn't be a problem. Finally, these people are easily reached and you can meet them without research and without buying any type of list. All you have to do is introduce yourself. Grab their business card and simply ask them if you found a deal would they be interested in looking at it. Most will encourage you because they're always on the lookout for more and more deals.
Now, you can start building yourself a list of qualified, hungry buyers to flip your properties to or to find private money to fund your deals. If you fail to see this as an opportunity, then you're a real knucklehead. Where else can you find so many red-hot, motivated buyers, all at one place with money ready to buy your next real estate deals?
Derek Pierce is a full time real estate investor and business owner. He got his start investing in real estate when he bought his first property in September of 2000. After this first deal, Derek literally became obsessed with Real Estate Investing. After being faced with the possibility of being downsized in 2001, he quit his job to be full time in the business and hasn't looked back since. Now, he reveals the no down payment real estate techniques he swears by in his Free Real Estate Investing “E Coaching Program. " To sign up for the Free E-coaching program, go to http://www.thereisecrets.com