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A. I got into it by way of investigation. I read plenty of books on real estate investing that covered when best to buy, and I recognized foreclosures as an avenue to pursue. What I found was that there are several ways to try and succeed with foreclosures. It's best to gather information and speak to those in the know first, then try on your own. As I continue in the market, I continue to learn.
Q. Do you work in foreclosures full time?
A. After learning and actively investing in real estate part time for three years, I recently quit my pharmaceutical sales job to focus full time on investing with my wife. We've expanded our interests to consulting others to help launch their real estate investing careers.
Q. Do you have a specific success story of a foreclosure deal to share?
A. Sure! Last April, I downloaded the listings from ForeclosuresMass.com and promptly did some follow-up marketing. We received a response and set up an appointment to visit the homeowner. The goal, as always, was to see if we could find a mutually fair and equitable solution to her troubles.
When we sat with the distressed homeowner, she admitted that she no longer
could handle the house and the payments. I asked her where she thought we
could help. She said that after thinking it over before we arrived, she
believed that if we could stop the foreclosure from going through, make up
the mortgage payments and pay off a lien, then she would split her equity
with us. We agreed on this approach and went to work.
We tried to work with the bank first - they stalled until two days prior to the auction - and looked at trying a short sale. The bank even tried to foreclose on the property by giving us a false auction date. We found this out and talked to the attorneys, who gave us the reinstatement amount two hours before the auction.
The auctioneer and lawyer showed up at the auction, along with 15 hungry investors. With the woman and her children inside the property, and me outside with a bunch of disgruntled investors, I paid up in full to stop the foreclosure.
Returning to the house, I told the homeowner that her she had time to do what she needed to do to get a place and move without losing her home, her dignity, her credit, and her equity. We both felt grateful to have worked this out.
After coordinating two months of work on the property, I received a call from the woman. She told me that the lawyers had sent an overage check to her for the money I had used to stop the foreclosure. She was so grateful and trusting that she wanted to give me that check! I thanked her, but I felt she should have it and the rest of her money, as per our agreement. We sold the house and everyone profited. For me, the situation meant much more than making a profit. I was able to save a person from destitution and get her money when no one else would have given anything but an eviction notice. And this instance helped me remember the reasons why I'm in this line of work!
Q. What have you learned by working in this business?
A. Whenever I am visiting with homeowners who are behind on their house payments, I rely on what I have learned about people through the years. That is - no one wants to be in this situation and often times, they are hoping we can help.
Q. What is the biggest challenge you face in the foreclosure market?
A. The biggest challenge is time. Foreclosures is a fast-paced industry. If the homeowner is not proactive about getting the help he or she deserves it can be too late to do anything. In these cases, you can't help them and you may make the decision to go to the auction. The other challenge is other inexperienced investors. They may actually hurt homeowners by not knowing the best way to handle a distressed property.
Q. What do you enjoy most about the foreclosure market?
A. I enjoy offering a fair and equitable solution to homeowners who probably wouldn't have one otherwise. You know, the investor gets the bad rap sometimes in the public eye, but a fair, knowledgeable, and professional investor can help where no one else can.
Q. What advice do you have for potential investors?
A. Potential investors really need a clear idea of why they want to get into the industry. If you are drawn only by the chance to make money, then you will end up doing it for the wrong reasons. It's about helping people and how you run a business. That's what I keep in mind while I'm working on a tough case.
Q. What is the biggest mistake that new investors make and how can they avoid making it?
A. Making it all about money is the biggest mistake investors make. Do not let money be your master. Know what you can and can't do for the homeowner. Chose a mentor who is fair and ethical. Their experience can get you along further and help you in your success to becoming a real estate investor much sooner.
Michael Ouellette is president of Integrity Investors, LLC (www.888HomBuyR.com). He can be reached at (888) Hom-BuyR or via his web site.
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