The Million Dollar Foreclosure System - Part 1 Table of Contents
Introduction
Chapters
In The Beginning
1
The Signal
2
Pre-Foreclosure
3
Direct Marketing Plan
4
When to Do What
5
How to Do It
6
Direct Marketing Details
7
Postcard Power
9
Audio Recordings 10
Inserts 11
Managing Response 12
Face to Face 13
Structuring the Deal 14
Now that You've Bought It 15
Title Search 16
Due-On-Sale 17
Left-Overs 18
Seven Secrets 19
For California Only 20
Appendix
(Found at end of manual)
Liens and Deeds
Two Cash Flow Tactics
Introduction
You are about to encounter a situation that will be colored by your own
thinking, your own outlook on life, your own system of values and your own
evaluation of yourself. All of these things and more will come into play as you
make decisions and judgments about the information you are now reading.
Will these words sentences, paragraphs come to life for you? Will you
accept the concepts and opportunities that it is their job to present to you?
Will you be able to open your mind and put aside reservations and
skepticism? Can you get past the words alone and allow yourself to discover
the wealth building power and force of the ideas that will be presented here?
You will be asking a great deal of yourself to do so. All of us have spent
years building a protective wall around our natural curiosity and enthusiasm.
That barrier is the normal result of the many disappointments, failure and
missed opportunities we have encountered in our lives. It takes determination
and optimism to again open a window and allow another ray of hope to enter.
But that is exactly what you must do.
When you have reached a point where you can no longer tolerate the
illumination of new ideas, new people or new situations you have slammed
the door on the zest of life.
Now, as you prepare to read on, please promise to give the words a
chance to come alive. Let the ideas grow and fill you with excitement.
Perceive that not everything you read must be new and startling. Realize that
it is the combination -the inspired blending -of new and old that creates a
magnificent, money generating system. A concept that can provide you with
everything you have ever dreamed of -if you will believe that dreams really
are just a preview of your future.
This manual is about reaching financial independence. The system
detailed here is a proven path to the kind of income that will place you in the
top 5% to 10% of the population. The techniques explained can easily be
mastered by spending a few hours studying these pages and doing some
basic research in your own area.
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First, this system works! It can make you wealthy! You are only required
to follow the path that has been laid out for you. The experimenting has been
done. The methods have been refined. Just read, learn, believe and act.
Make the commitment right now to focus on putting this system into
action. Don’t be distracted by other business opportunities. Put aside
extraneous interests. Make this your hobby, your vocation, your passion. For
the first year develop a tunnel vision that shuts out all but the necessary
family, personal and employment responsibilities. Doing this will turbo charge
your progress and rush you to the point of success.
If you will follow the guidance of this manual you cannot fail! If you will
devote yourself to this system you cannot fail! If you will just give the system
and yourself a chance you cannot fail!
These pages contain the formula for success. The chance of failure has
been removed. Others with far less ability than you have triumphed while
riding this system. You will too! Just put the plan into action!
You have been looking for and waiting for something that would inspire
you to action. Something you could feel confident about. Something that is
worth your time and commitment.
<RX•YH IRXQG LW
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Chapter One
IN THE BEGINNING
This is a system for building wealth through real estate foreclosures.
Wait! Don’t close your mind and say, "Hey, that is nothing new." Read on
and discover the secret that makes this system something very special and
unique. Let’s start at the beginning.
Real estate has proven to be the number one road to wealth for thousands
of people around the world. In the United States there are many rags to riches
stories based on investment in real estate. Real estate is one of the few ways an
ordinary person can start with nothing and build a fortune. Why fight success?
Build your money machine in the field of proven opportunity.
To be successful in real estate it is imperative that you consistently locate
property that can be purchased for less than its true market value. The two
primary ways for the small investor to find bargain real estate is to locate either
distressed property or distressed property owners. This system focuses on
distressed owners.
One of the very best ways to locate distressed owners is to monitor
foreclosure actions. Here is how that works:
When someone borrows money to buy a home (or borrows money against
the equity in their home) they must sign a promissory note, which is their
promise to pay back the loan. Lenders want more than just a paper promise for
their money, so they require the homeowner to pledge his property as security
for the loan. This is done with a mortgage or trust deed. The note is the promise
and the mortgage or trust deed pledges the property as security for the loan. In
effect the property owner has told the lender that if payments aren’t made on the
loan the lender may take the property to satisfy the debt.
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Each state has slightly different laws concerning these security
instruments. Some states use mortgages and other use trust deeds, still others
use both. From this point on we will use the words "trust deed" and "mortgage"
interchangeably.
If the homeowner stops making payments (defaults) on a loan the
mortgage allows the lender to force the sale of the property to recoup his money.
That is called a foreclosure.
There are two methods of foreclosure. The first is the judicial method. This
means that the lender must bring an action in a court of law and get the court’s
sanction for the foreclosure and sale. This is the usual means of foreclosure
under a "mortgage". In some states a mortgage may contain a "power-of-sale"
just like that of a trust deed, which allows non-judicial foreclosure.
The other method of foreclosure is non-judicial. This is the preferred
method, because the property can be brought to sale much quicker than is
possible in a court action. Non-judicial foreclosures are the rule with trust deeds
and those mortgages that carrying a power-of-sale clause.
Here again, details of law differ in each state, but generally a non-judicial
foreclosure goes along these lines:
After the homeowner has missed two or more payments the lender
(through a trustee) may record a Notice Of Default with the county recorder. The
Notice Of Default starts the legal clock running on the foreclosure process. From
the day this notice is recorded the homeowner has three months (varies) to
catch up on all payments that are due, plus the costs that have been incurred by
the lender in beginning the foreclosure process. If the homeowner is able to
come up with the cash during this time period the foreclosure action is lifted and
everything returns to normal.
If the homeowner fails to bring the loan current by the end of the three-
month period a Notice Of Trustee’s Sale is recorded and published once a week
for three weeks. If the homeowner has not made up missed payments and
foreclosure costs during this three-week period the property is sold at auction on
the courthouse steps.
That is an overview of a typical foreclosure process. Details vary in each
state. You must become expert on the foreclosure laws in your state.
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Start by going to the public library and finding any books that describe the
process in your state. If so, learn what you can from them, then visit the law
library at the county courthouse. The librarian there will help you find what you
are looking for.
In the law library you will find two types of books that will be helpful:
One contains the law as written by the state legislature. Often called statutes.
The other is a "how to" book written for attorneys and called something like a
"practice guide".
The practice guide will be the more helpful for it is written in easy to
understand language. The practice guide contains the practical aspects of the
law, so attorneys won’t have to research and reinterpret the law every time they
have a case.
The law library is a public facility. Although legal professionals use it most
often it should be open to everyone. It is a valuable resource for any
entrepreneur. After one or two visits you will feel comfortable there and you will
have access to a wealth of valuable information.
You can use your computer and the Internet to find legal information. Try:
www.Findlaw.com
Or do this, go to www.Google.com . In the search window type "state legal
statutes?" From there you can find your state and the location of your state's
laws. Most states now publish their statutes on the Internet for everyone to see.
Now that you have a general understanding of the foreclosure process you
may recognize the two primary opportunities for a real estate investor.
One is the auction on the courthouse steps. If the property owner fails to
bring the loan payments current his home may be sold to the highest bidder at a
public sale. It is possible to buy property well below market value at these sales
and you may occasionally be interested in bidding for a property at the auction
and we will cover those situations later in this manual.
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But beware. This is only for the most experienced and well-financed
investor. The Million Dollar Foreclosure System offers something far better.
We will explain how buying properties before a foreclosure sale is the
golden opportunity and it is here that you must focus your attention. The gold is
found in pre-foreclosures! How to claim that treasure is exactly what you will
learn in these pages.
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4
Chapter Two
THE SIGNAL
Remember, when a property owner begins missing payments on his home
loan the lender has the power to start foreclosing by recording a Notice of
Default (or other notice depending on the law in your state) or starting an action
in a court of law. A foreclosure becomes a public notice that a legal action has
begun on a particular property.
It is just as if someone began waving a flag to let you know that here is a
distressed owner and there might be an opportunity to buy real estate at a
bargain price. Here is where you begin building your money machine.
The foreclosure process is one of the few situations in real estate investing
where you can easily find people in financial distress who may be willing to sell
their property at less than market value. The notice is right there in the public
records and it contains the name and address of the homeowner.
Your first step is to gather these names and addresses on a weekly basis,
so you can prepare to contact them. Since the Notice of Default must be
recorded with the County Recorder (or the like) you know exactly where to find
the information you need.
The recorder will have some kind of index to show all documents that have
been recorded and the names of the people involved in the filing. This is usually
called the Grantor/Grantee index. You may find this index on microfiche, in large
books or in most counties in computer files.
The Grantor/Grantee index is a public record and is available to anyone
who wishes to use it. Visit the office of your County Recorder and you will find
the files and a clerk who can show you how to use them.
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Many different kinds of documents are recorded every day. The
Grantor/Grantee index has listings for both parties involved with any recorded
document.
In the case of a Notice of Default, both the name of the lender and the
name of the borrower would appear in the index. The index is arranged
alphabetically by last name and each listing also shows the name of the other
party involved in the action, plus an abbreviation for the type of document. For
example, let’s say The Nasty Bank filed a Notice of Default against Don Trumpe.
Under the T’s in the index you would find something like:
GRANTOR OTHER
GRANTEE PARTY DATE DOC NUM
Trumpe, Don Nasty Bank 6/32/99 NFD 315367
Tubor, Bob City of L.A. 5/ 1/96 JUDG 251838
Twash, Jack Jagger, Mic 8/21/97 DEED 174421
The first entry is Trumpe vs. Nasty Bank. Under DATE you see that the
document was recorded in June. In the DOC column you find NFD, which stands
for Notice of Default. In the same index under the letter N you will find a similar
listing for Nasty Bank
The entries following the Trumpe listing are examples of how any line
might appear in the county records. Long lists of names followed by a variety of
documents that have been filed for or against the parties named.
Each listing shows the name of the party bringing the action, the name of
the party who is the target of action, the date the document was filed, a code
indicating the type of document recorded and the number the county recorder
has assigned to that particular document.
Often the recorder maintains the index by years or groups of years. You
may find the index divided in this manner:
The years 1966 through 1970 are in one section. This document and accompanying materials are designed to provide authoritative information in regard to the subject matter covered in it. It is for illustration purposes only and presented with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional opinions. If legal advice or other expert assistance is required, the services of a competent professional should be sought. |
