If you’re looking to buy foreclosure property but are tired of dealing with the fierce competition for mortgage pre-foreclosures and the other bidders at tax sale, fear not: there’s a way you can buy foreclosure property with next to no competition – all while avoiding the tax sale. You just have to be willing to wait until a specific time in the process.
First, if you’re investing in mortgage pre-foreclosures, you’re going to have to switch to tax foreclosures. They’re the clear winner profit-wise. The redemption period after tax sale is key – this is when you’ll employ your insider strategies and get the best deals. It’s difficult to buy foreclosure property from mortgage delinquent owners, and there is no redemption period in most cases.
So, how do we buy foreclosure property without any competition? By approaching the owners directly during the last few months they have to redeem the property – after the property has been “sold” at tax sale. During these final months, even the most stubborn owners have to admit to themselves that they are going to lose the property, and they’ll be ready to hear from you and let their properties go for next to nothing.
Best of all? There is little to no competition during this time. Your competitors at tax sale almost never exploit this method of investing. Why? Maybe they’re lazy or afraid to have to deal with owners directly. More likely, they’re just unaware that in most places, it’s still legal to buy foreclosure property directly from owners – even after it’s been “sold.”
If you’re looking for another way to make money from foreclosures but you aren’t interested in dealing with properties, there’s another way to make money from these same tax foreclosure properties without ever having to buy a deed – collecting the overages for a finder’s fee. When more is bid at tax sale than is owed in back taxes, that excess amount is held for the former owners. If they never show up to collect it, after a few years it escheats to the government, and the owners can’t ever get it again.
Due to a little-known loophole, these funds aren’t governed in most places by finder’s fee caps. This means that if you can find the funds, find the former owners, and get them under contract to assist in the collection of their funds, you can legally and ethically charge up to 50% as a finder’s fee – and with these funds regularly running into the tens of thousands of dollars, you can make a nice living just off collecting overages – or, operate it while you buy foreclosure property and maximize your potential profit.