NICHES THAT BRING YOU RICHES – PRE-NOTICE OF DEFAULT TAMERA ARAGON
o
You have more time to pre-sell the property before you close on it.
o
You get the deal before mortgage arrearages get out of hand, opening up more opportunities to take
property over “subject to” the existing loan as you work on selling it.
What are the downsides of this niche?
o
Sellers may not be as motivated because they are not as close to foreclosure. I have found that even those
who have received a written notice of default often deny the seriousness of their situation. They have time
to work something out with the bank. So, if they would rather stay in their home, talking to them early may
not help. They will be looking for ways to get caught up before selling. However, if your market is declining,
many homeowners would rather walk away from their mortgage than keep a house that is worth 20,30,40
or even 50% less than they owe.
o
You have to pay a higher price for leads.
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Leads for this niche are usually found on credit reports and the credit information is often not posted by
creditors until 30 days after the payment is missed. Therefore, the credit report is usually 30 days farther
behind than actually noted on the credit report, or can even be paid up by the time you see it.
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You still have to find houses with enough equity in them for you to buy at a discount. And, in many U.S.
markets today, this is like finding a needle in a haystack.
What are good market conditions to
consider this niche?
o
Look for the following market conditions in the area
(s) you plan to research and invest.
•
A high number of homes in pre-foreclosure
•
Interest rates on loans are high
•
Lenders tightening their belts and not flexible
What are bad market conditions where you
might want to avoid this niche?
o
Avoid focusing on this niche if these conditions
exist.