Distress occurs in many ways. Sometimes it is caused by purely financial situations. Other times a spouse gets fed up with real estate and wants to convert everything to cash. In yet others, by the fact that a property has been transferred by will to someone at too great a distance for them to manage it.
Everybody - investors, fixers, landlords, wheeler-dealers, and financiers - who have taken the time to learn the business and to cultivate buying and selling skills can find a profitable niche to work in today's foreclosure market. Before you rush out to make your first million, there are some "don'ts" that you should observe if you want to avoid needless trouble and expense:
I started out buying houses from people who were in default on their mortgages by giving them as little cash as possible, maybe assisting them in finding someplace move, and renting or selling their houses without using much cash at all. That approach didn't work, very well with lenders who had taken back houses in foreclosure, and who now wanted to liquidate them to rebuild cash reserves . . .
When buying properties from owners who have taken them back, you'll have to overcome several obstacles. First of all, they'll always think of the properties as being worth the last price they sold at. They'll conveniently overlook the fact that they'd have never gotten them back if they'd been worth the debt that was on them. Let's face it. If they'd been worth more, wouldn't someone have bought them at foreclosure? Wouldn't the former owner have been able to sell them to the public. The fact that they have the properties back is a clear sign that they weren't worth what was owed on them.
