How to Analyze and Target Your Foreclosure List

We all know that investing in foreclosures can be very profitable. You are not hurting those people. You are helping them save their credit, avoid stress, and in the end, save some of their equity.

I have a rule when I’m investing in foreclosures: If the deal I’m structuring is not helping the seller, I will not do it. So, if you are ready to accept that rule, then let’s continue…

It All Starts with “The List”

The foundation of every business is finding customers–that is marketing. When we look for motivated sellers in foreclosure, we have a few options to find them. You can start door-knocking, telemarketing or sending them direct mail. No matter which of these approaches you take, you’ll need the list of people in foreclosure, people in default where their lender has started the foreclosure process. So it all starts with the foreclosure list.

Analyzing your foreclosure list helps you determine your marketing tactics.

Learning to analyze your foreclosure list helps you determine your marketing tactics. This is why it is crucial to have the most current or “freshest” list you can get. The fresher the list, the better the results.


Quick Process States

If you live in an area where the foreclosure process is short, only a few weeks from the recording, it is especially important to have that fresh list, preferably only one or two days old. Why? Because you have competition!
Homeowners who only have a few weeks to decide what to do have to make a decision fast, and you want to be one of the first to contact them. These people react quicker and make a decision earlier, so they may call and establish a relationship with one of your competitors and at that point, may be “blind” to any other marketing.
One investor I know gets the daily recordings and knocks on every door the very next day. He gets a lot of rejection, but he also makes a lot of deals! This may not be your strategy, but it demonstrates the importance of getting there first if you live in one of those quick process states.

Long Process States

If you live in a state where the foreclosure process is 3, 6, or even 9 months, the person in foreclosure has a lot more options and hopes. Some of these people will just hide their head in the sand and try to ignore it, but sooner or later the gravity of the situation sinks in. Your list in this case may be older, but not over one week old unless that is the only option.
The long process states will determine your marketing strategy. In the short process states, being first is important, and you will probably only mail to them in the first few weeks. But if foreclosure lasts 6 months, you will want to mail over many months.
In the long process states, being first may still give you an advantage over the competition. Here’s why. Once the foreclosure notice is filed and recorded and therefore public, there will be hundreds of other investors trying to contact the homeowner by knocking on the door, or mailing letters to them, so your attempt may be lost in the crowd. Also, once pursued by so many, the homeowner’s attitude changes and it’s harder to deal with them.

A Word of Caution

If you do pursue the defaults the day they are filed, keep in mind that the owner may not even know that the foreclosure has been filed. I found that the hard way, from the homeowners who were not aware of it yet. I was the one bringing in the bad news. Later on I learned that the foreclosing services had 5 days (varies in different states) to serve the homeowner after they recorded the default in public records.
So it’s possible that you may knock on the door before they get served. You will have the choice as to whether to tell them the bad news or not, and that would depend on if you use that in your negotiations or not.

Send Multiple Mailings

Doing multiple mailings to the people who have a longer process will often give you a competitive edge. You see, once the foreclosure is recorded, the homeowner will get a ton of mail, but most investors mail once, and that’s it. So a month into the foreclosure, the homeowner may not be getting anything in the mail anymore. I have often gotten phone calls from homeowners after the second and even third letter!
Another thing to look at as the date of last sale to determine how long the owner has owned the home. If they have been there for years, then the more emotional they will be about their situation. In this case, your letter must address the emotional issues involved. Conversely, if the owner has only had the house for a year or less, they are less likely to be emotionally attached to the house.
Since everyone is limited on their marketing budget, it is wise to further filter the list before mailing to it, or deciding to call or door-knock. We do that by inserting different criteria, such as price range, ZIP codes of interest, year built (sometimes), type of property (we only go after single family homes), loan origination date, loan amount, etc.

Stay One Step Ahead of the Competition

It is beyond what I can cover in this post, but keep in mind that some lists include those who fell back into foreclosure process after their bankruptcy was dismissed. Since the foreclosure process is NOT restarted, but rather it continues where it stopped. Most investors will not be aware of them. That means less competition and more money for you!
There is a lot of information on a foreclosure list, but this is a good start. Understanding it can lead you to more success. Post your questions in the “Comments” section below…

By Marko Rubel

Marko Rubel is a bestselling author, self-made millionaire, and master real estate investor. He immigrated to the U.S. from Croatia as a champion boxer in his 20s without speaking English and having little money. He has been named a real estate expert at the National Real Estate Investing Association that represents over 40,000 investors nationwide.