Finding deals in today’s home market can be a challenge, but it gets a lot easier when you use the solid resources at your disposal. For instance, there are foreclosed homes out there that come at a huge discount for people who are willing to look for them. Government foreclosure homes are priced to move and there can be some nice ones thrown in there, too. Whether you are looking to purchase on for residential purposes or you like to buy and sell real estate, the point is still the same. So where do you find all of these foreclosed homes?

It is important to have access to free listings of government foreclosure homes right away. There are plenty of services out there that allow you to have a week of free access to these listings. That is plenty of time for you to be able to find some good deals, and if you need the access for any longer than seven days, you can just pay the small fee and have that. When you are talking about savings thousands of dollars on your home purchase, $20 or $30 is not much at all to pay. Additionally, the free listings services allow you to cancel your subscription at any time.

The foreclosed home market is always changing and houses can move quickly. When a great deal hits the market, you have to jump on it quickly if you want to have a chance. This is why so many people find it difficult to buy foreclosed homes. They don’t get the information quickly enough, so when they finally spot a home, they are too late to make a move. With foreclosure listings, you will know when the home hits the market. They are updated every day, so no good deal gets past you.

The thing that makes these foreclosure listings a no-brainer is that you have access to as many as one million listings from all over the country. That is a ton of homes to choose from and they are all in different areas. You will want to use the service that lists the most homes in your area, but it never hurts to have options elsewhere, too. Additionally, you can find listings that features pictures and full descriptions of the homes, so that you know what you are getting into before you take the time to investigate the home.

By the way, by researching and comparing the best free foreclosure listings services in the market, you will be able to determine the one that meets your specific requirements, plus the free or cheaper options.

Have we got your attention now? We’re sure we do. When done the right way, investing in real estate can create an inflation-proof cash flow that will take care of you and your family forever. Let’s get one thing abundantly clear, however.

Setting it up will take work.

Using the ideas we are about to share with you and working part-time, it may take you as long as 10 years to build your real estate cash flow to the point where you can retire and live comfortably on it. Working full-time, you may be able to do it in less than half that time.

Success Team—Peter’s Story

Over the years, I’ve built businesses that invested in foreclosures, single-family houses, apartment buildings, and large commercial real estate projects. I’ve bought everything from small, one-bedroom condos to large apartment complexes to land development deals. Remember, when I first got started, I was a 33-year-old mechanic with no formal education, no big business experience, and no knowledge of real estate. But within three and a half years, I became a millionaire. If I can do it, you can do it too.

In fact, it’s my belief that there is no better vehicle for creating and enjoying your wealth than real estate. It’s such a simple yet powerful wealth-creating force that the average person can become incredibly successful with investing. The key is to get started before you think you’re totally ready—because you’ll never feel totally ready!

THE THREE INVESTOR LEVELS—YOUR PROVEN FAST TRACK TO REAL ESTATE SUCCESS

The three investor levels—your proven fast track to real estate investment success—are described in the sections below.

Level One

Level One investing is all about belief. It’s about proving to yourself that not only does real estate work for other people, but that it works for you! How do you prove this to yourself? By doing a few deals and making a significant profit. As a Level One investor, you eventually gain the certainty that real estate will be your proven path to financial success. The key for Level One is getting yourself into action.

Level Two

Level Two investing is all about mastering the fi ve core investor skills of real estate investing (see Figure 1) and building an investment business that works without your needing to run it day to day. At fi rst, Level Two is about building your knowledge base of investing strategies, tools, and techniques. Later, it’s about building a real estate investing business. Building your knowledge base helps you leverage yourself. Building your investing business lets you leverage other people, systems, and outsourced solutions to create value in the marketplace without your being there to do the work.

Why is this so important for you? Because ultimately if you don’t learn to leverage yourself through building a strong business infrastructure of systems and people, you’ll be limited in two critical ways. First, you’ll be limited in the scale of projects and profits you can earn; you just can’t do big deals without the infrastructure in place to make the deal stand. Second, unless you build an investing business, you’ll be limited in your potential to create the time and freedom you truly want. That’s why it’s so important to learn to build an investing business.

FIGURE 1 The Five Core Skills of Successful Investors

1. Marketing—Finding great deals in any market Structuring—How to structure win-win real estate deals

2. Negotiation—How to get the other party to say yes to the deal you want

3. Analysis—How to determine if a deal is good in five minutes or less

4. Contracts—How to write up money-making real estate deals

Level Three

Level Three investing is all about transitioning into the role of a passive investor and business owner. If Level Two investors are the heart pumping their business forward,

Level Three investors are the brain directing the big picture of the business and enjoying the consistent profits from that business, without getting caught up in any of the daily activities. Imagine having built your real estate minie mpire in such a way that you earn massive income without directing the business day to day.

Level Three investors have simply learned to put their investing on autopilot so they don’t just make money, but they create passive streams of income. In the beginning, you’ll have to front-load your effort as you develop as an investor. It will take you hundreds of units of effort to succeed as a Level One investor and get your fi rst few paydays.

Later, as a Level Two investor, it will take you 10 to 20 units of effort to get your paydays. And finally, as a Level Three investor, it may only take one or two units of effort to enjoy a lifetime of paydays. The secret is to understand that it really is worth getting all the way to Level Three, but that you’ve got to pay your dues to get started.

The foreclosure business we created gave us the cash flow to venture into more aggressive Level Three investing. Without the cash flow that our foreclosure business provided, we would not have had the flexibility to look at more complex real estate investments. To this day, our foreclosure business is alive and thriving.

We have turned that into a Level Three activity. We now have buyers we have trained to do the transactions, and we share in the profits. It keeps cash coming in and allows us to stay in our highest and best-use activities, which are now all in Level Three.

Key Characteristics of a Level Three

Foreclosure Business

Following is a list of the key characteristics of a foreclosure business operated at Level Three: It’s healthy and growing yet takes fewer than 10 hours a month of your time.

All day-to-day buying and selling decisions are based on proven formulas that are immune to individual opinions and mistakes.

It has the capacity to take on more business without decreasing net profits. It’s flexible enough to make money in any real estate market. It has comprehensive business systems documented in manuals, not merely in the heads of your team. It creates cash flow, long-term wealth, and a fun, balanced lifestyle for your team and for you, the owner.

Once you’ve taken action as a Level One investor, the next hurdle you’ll face is succeeding as a Level Two investor who needs to refine his or her investing skills, then build an investing business.

Let’s break this down into finer detail so you can use these insights to do what the average investor never does. You can free yourself from the day-to-day need to run your foreclosure business and reach Level Three success.

Three Stages of Level Two Investing

Level Two investing is broken down into three distinct stages. Each of these stages has a different developmental focus for you, the investor. Here’s a quick snapshot of each of these stages.

Early Stage Level Two. If you are in this stage, you’re learning to master the five core skills of successful investors: finding deals, structuring deals, negotiating deals, analyzing deals, and contracts and paperwork.

It usually takes Early Stage Level Two investors 12 months to learn the core skills and gain the confidence and composure to use those skills effectively. Once they’ve built this foundation of skills, they move on to Middle Stage Level Two investing. Middle Stage Level Two. If you’re in this stage, you are refining your investor skills and learning to leverage yourself so you can produce more for your investing business. At this point in your investing, you are the central hub around which your business revolves. You’re like a doctor whose whole office is organized as efficiently as possible.

As a Middle Stage Level Two investor, you leverage your time every way you can by building the team and systems around you to keep producing for your business. You’ve become fluent in all five of the core investor skills. You can take a deal and work it smoothly from start to finish, troubleshooting it along the way as needed. With this competence comes the confidence to jump on good deals fast.

Yes, you’re still working to fine-tune your five core investor skills, but at this point, it’s much more about making small refinements than developing these skills from scratch. As you transition through Middle Stage Level Two investing, you increase the number of ways you leverage yourself by building systems and growing your investing team. You tentatively let go of pieces of your business and free up your time to focus on those parts that earn you the greatest return for the time and energy invested. You hire a full-time or part-time assistant, outsource your bookkeeping, and perhaps even contract with someone to show your properties (ideally on a commission basis where you only pay for results).

At this point, you either make the crucial shift to leverage yourself by growing your investing business, or you get caught in the daily grind of being the sole producer for your investing business. Many Middle Stage Level Two investors get trapped because they never learn to separate their business from themselves. Refining your skills and leveraging your time can make you an extremely successful Middle Stage Level Two investor, but ultimately to break out of the small-time bubble, you need to build an investing business that has a life beyond your being the hub of it.

As you know, you’ll ultimately reach a limit to what you’re able to produce through your own efforts. This is why it’s important to progress to Advanced Stage Level Two investing. Advanced Stage Level Two. You’re building the systems, teams, and outsourced solutions your business needs to generate profits consistently and independently of you and your efforts.

As a Middle Stage Level Two investor, you were the central hub around which you built the pieces of a viable business. Chances are, you were the one driving it, negotiating the deals, and directing who does what The biggest difference between a Middle Stage Level Two and an Advanced Stage Level Two investor is that in the Middle Stage, you’re building the business to complement your skills and leverage your investing efforts. But because you remain at the hub, if you aren’t actively involved, your Middle Stage Level Two business will grind to a halt….

Troubled property, or sometimes distressed property, is a polite way bankers and investors talk about a borrower who can’t or won’t make his or her mortgage payments on time. The term has nothing to do with the property itself.

Residential

Most investors start with single-family residential. It’s generally used to describe a house, but could include a condominium. Smart buyers will usually limit themselves to a particular price range. Finding tenants or buyers for a $50,000 house is entirely different from finding them for a $500,000 house. Fixing up the more modest home can generally be done yourself, while the larger one will require hired professionals. The profit on an expensive house should be larger, but the risk is usually proportionately greater. Single-family residential properties are typically owner/occupied, meaning the owner lives there.

Sometimes they’re investment properties, used for rental income. Knowing this makes a difference in how you evaluate whether you want to buy the property. Some investors specialize in owner/occupied foreclosures because they think it provides a ready-made tenant when the former owner wants to stay and pay rent. Other people avoid them like the plague. They think single-family residential is too much work, and owner/occupied presents too much risk of something going wrong at the last minute. There’s no wrong answer here.

A condominium is a type of single-family residential property. What makes it special is that it’s an ownership arrangement in which each person owns a particular area, and the condominium association owns all the common areas, such as hallways, elevators, sidewalks, and lawns. Condominiums generally have strict rules, and owners are responsible for their proportionate share of some potentially expensive repairs, or for improvements like new roofs and landscaping. As a result, buying a condo in foreclosure requires additional homework on your part.

Multi-family residential property could be a duplex (two units in one building), a fourplex (four apartments—usually two upstairs and two downstairs), a sixplex, or something larger, which is called, simply, an apartment building or apartment complex. Even if all you own is one duplex, and you live in one side of it, you can legitimately tell people, I invest in multi-family residential properties. If, on the other hand, you own 250 houses that you rent out, these are all single- family residential properties, even though you, personally, rent to multiple families. You invest in single-family residential properties.

Commercial

Commercial property is typically an office, retail space, a sit-down restaurant, or a fast food establishment. Except in small towns, people further specialize within commercial property. I, for example, know all the office buildings in my part of town—about six million square feet of office space. I know what the market rents are, whose leases are expiring, and who’s coming to town and looking for space. I know how much it costs to build an office building, and what rents someone would have to charge in order to justify new construction. I could confidently invest in a small office building, but would be lost trying to figure out what to do with a restaurant site.

Retail

Retail further breaks down into single- or multi-tenant buildings, convenience stores, strip centers, anchored and nonanchored shopping centers, regional malls, lifestyle centers, and big boxes. Most investors specialize within a price range rather than retail category.

The C-Store Shelter

Professionals call a convenience store a C-store. These are very desirable investments because you can get bigger tax deductions than for other properties. If you find an opportunity to buy a convenience store before foreclosure, you can probably find all sorts of partners to help with the money for the investment. Here’s why. The IRS allows you to write off a portion of the purchase price of your property every year. It’s kind of a game everyone’s agreed to play. The premise of the game is this: dirt never gets less valuable over the years, but anything on top of the dirt declines in value the older it gets. This could be buildings, roads, fences, light poles, or peach trees. The IRS has rules for how long it takes different things to eventually wear out and become completely worthless. Sometimes they really do wear out in that time period; sometimes it takes longer; and, sometimes it happens much more quickly. It doesn’t matter— this IRS game bears no relationship to reality. It’s just a system that everyone has agreed to pretend is real.

The process of wearing out is called depreciation. It’s a deductible expense on your taxes. Depreciation lets you write off large expenses for real estate, even though you don’t have to write checks for those expenses. That’s called sheltering income because other income (such as from your job) can hide under the shelter of the depreciation tax deductions and not be taxed by the IRS. High-income professionals, like doctors and lawyers, are always looking for ways to shelter income. That’s why they make logical partners if you need someone to put up the cash while you contribute the time and know how to buy foreclosure properties.

The ability to write off depreciation deductions is one of the major advantages of investing in real estate instead of other things. Because of that, it’s critically important to understand. The central concept to depreciation deductions is knowing the IRS’s opinion about the useful life of different kinds of property. Useful life is an estimate of how long something will last before it becomes completely worthless. The IRS does not care that a rental house worth $50,000 in 1976 might be worth $150,000 in 2005. You are allowed to pretend it will be worthless in 2005, and to write off depreciation every year until 2005. (In 2009 is different)

According to the IRS, most commercial buildings will decline evenly in value over the course of 39 years and then be worthless at the end. They are also of the opinion that residential properties will last only 27.5 years. For some odd reason, the IRS has decided that convenience stores will last only 15 years. So, you can write off 1⁄15 th of their value every year. That means you can shelter over twice as much income with a C-store as you can with a dry cleaners occupying the exact same building at the exact same spot.

That’s what makes them such hot investments. Doctors, lawyers, and other highincome people love to invest in convenience stores. You’ll be able to find lots of partners if you run across such an opportunity.

Shopping Center

A typical strip center has five to ten tenants on a single story with parking out front. Each tenant usually has a small space—around 1,000 square feet. In shopping centers (strip centers and malls), anchor refers to a big tenant that attracts customers, who will then also visit the smaller tenants. An anchor might be a grocery store, a department store, or a decorating center. It anchors and holds steady the constant stream of visitors. Because anchors are so important to the well-being of the other tenants, many anchor leases will prohibit the anchor tenant from closing during the term of its lease. In the trade, we say the lease has a prohibition against going dark. In other words, even if the anchor were willing to turn out the lights, move to another part of town, but continue paying rent at the old location, it wouldn’t be allowed. That’s because, if the anchor closes, the traffic flow to the shopping center dries up and the smaller tenants eventually go out of business, too.

If someone tells you about a shopping center opportunity, you can start your due diligence right away and ask two questions, “Who’s the anchor?” and, “Is there a prohibition against going dark?” These questions, all by themselves, let people know you’re an intelligent investor.

Regional malls are the huge, multi-department store centers with access via interior corridors lined by other stores. They’re not as popular as they once were. That means you’re going to see more prospects to buy these out of foreclosure. They can present fabulous opportunities if you’re energetic and creative. People are buying them cheaply and turning them into antique malls, training centers, city halls, medical complexes, and megachurches.

The newer lifestyle malls are all the rage in temperate climates like California and the South. People park in front of each store and walk or take trams between stores. There’s generally artwork, entertainment, multiple specialty restaurants, and other amenities to attract people and encourage them to linger. Think of a lifestyle mall as being the suburban equivalent of 5^th Avenue in New York City or Rodeo Drive in Los Angeles. I doubt you’ll be in a position to buy one of these, but it’s always nice to be able to fling around the right terminology when talking to friends at a picnic. You never know where your prospects might come from, and credibility is critically important for getting leads on properties.

Big Box

A big box is a large, plain vanilla building suitable for a Wal-Mart, Target, or something similar. Vanilla is another real estate investor’s term, meaning “easily changeable into anything.” Many big boxes formerly occupied by K-Mart or Sears are being converted to climate-controlled self-storage, fitness centers, or craft malls. The opposite of a vanilla building is a purpose-built building. A bank, a car dealership, or a widget factory are all built in a specialized way for a particular purpose. It’s hard to adapt them for something different. You need to think about that when looking at a foreclosure. The greater the variety of things you can do with a property after you buy it, the less your risk is going to be.

Industrial

Industrial properties are usually manufacturing, assemblage (putting together components manufactured some place else), high tech, or warehouses. Most people tend to think of these as high-risk investments to buy out of foreclosure, but that’s not always the case. A great industrial property, with a terrific tenant who always pays the rent on time, might be in foreclosure because the landlord takes all the money from that property in order to pay other bills. Or, the owner might have given a mortgage on that property as additional security on another site that was in trouble and unable to pay its bills. (This is called cross collateralization.) As a result, the lender is foreclosing on one troubled property with a bad tenant or no tenant, and on a good property that’s a terrific investment.

You don’t have to buy both of them at the foreclosure— you can buy just the good property.

WANT TO BUY HOMES UNDER $10.000 ?? CLICK HERE

When you understand and apply the ideas in this blog you’ll learn that motivated sellers don’t care about your credit; they don’t care about your home life; they don’t care about you, period. They care about getting out of tough situations and relieving themselves of major sources of pain in their lives. And sellers are only one of several funding sources for your foreclosure deals.

Myth #3: If You Buy a Property from a Seller in Foreclosure, You’re a Shark Taking Advantage of Another Person’s Misery

This false belief would have you believe that you are out there swindling sellers by sneaking into their home, fooling them into signing documents, and running away with all their cash before they wake up to what you’re doing. Far from it!

Even if some investors do business that way, let’s make it absolutely clear: that’s not how members of the Mentor Family do business. The Mentor Family is a group of our clients and readers who’ve discovered that real estate is about more than just making money. You see, when you help sellers in foreclosure, they are thankful for your taking time to understand their situations and finding a win-win way to solve a problem they’re embarrassed and scared to admit they even have.

Investing in foreclosures is like holding the core of your being up to a mirror. If you are a good person, what refl ects back is that you help people and get paid well for doing it. Isn’t that what business is all about—providing value and getting paid handsomely for it?

Success Team—Peter’s Story

When I think about everything I’ve accomplished in my life, the things that really stand out aren’t the number of properties I have purchased or the wealth I have accumulated. Rather, it’s what that financial wealth has enabled me to do and the people I have been able to help. I remember Fred and Evelyn who wanted to sell their house. I recall sitting in their gorgeous home on a great lot. The house seemed perfect, but the property never sold. So Fred and Evelyn called me and we sat down at their kitchen table. Fred was doing all of the talking. It took a long time, but he fi nally felt comfortable enough with me to share their concerns about selling the house. They had received offers on the property, but all of the offers felt cold to them. No one had ever taken the time to sit down and really understand them. Sadly, a short time before this, their son had drowned while playing in the creek toward the back of their yard. It was important for them to share that and have someone show interest.

Fred and especially Evelyn were able to move on with their lives as a result of our conversation around that kitchen table. It emphasizes that when you invest in foreclosures, you fi nd yourself talking with the sellers at a critical time in their lives. So take the time to listen. And realize that the connections you make with sellers and the connections you make with other investors who have the same mindset as you do are an important part of what we do as real estate investors.

When we tell people, “Anyone can make big money investing in foreclosures,” most simply shake their heads and walk away. We watch them passing on what might be their best chance to create security and freedom for themselves and their families while they help people like Fred and Evelyn. They simply don’t believe—or can’t believe—that they could be successful this way. They say they don’t have enough money, or that they don’t know how, or that it’s too hard. Sadly, many let themselves sink into the “lives driven by fear and obligation” that so many people lead.

But you’re different. Something inside made you realize it’s possible for you to create a life driven by passion and purpose, a possibility fueled by creating your fortune with real estate. You may not have all the know-how yet, but with the specialized knowledge you’ll gain from reading this blog, you’ll uncover dozens of ways to find profi table foreclosure deals and structure them without using your cash or credit.

We know this sounds too good to be true. But success takes a great deal of study, disciplined action, and willingness to set aside many deeply rooted beliefs you have about wealth. If you are willing to add these three ingredients to the recipes explained in this blog, we guarantee you can and will make big money investing in foreclosures.

Myth #1: It Takes Money to Make Money

There you are, sitting in your family’s dining room after enjoying a full holiday meal. You’re a young child; your family is gathered and talking about life. How many times did you see the dreamer in your family get his or her dreams shot down with a bullet like, “You can’t do that. Where will you get the money to do it?”

Were you the dreamer in your family who felt the sharp stab from those well-intentioned remarks? Did people who influenced you keep drilling into your head, “It takes money to make money”? Where is this myth written in stone? And if it were really true, how did people like Warren Buffett and Bill Gates start with nothing and build net worths of billions of dollars?

Success Team—Peter’s Story

“I started investing while I was an auto mechanic working for less than $15 an hour. Not only didn’t I have a large chunk of investing capital to start with, but my wife and I had two small kids at the time. In the home where I grew up, my dad had to work really hard to provide for his wife and seven kids. One day, I reached an emotional low when my boss yelled at me for helping myself to some coffee that he’d set out for customers. That incident gave me the courage to find a way to make investing work for me. Sometimes it does take an emotional low to help you commit to never settling for less again.

Success Team—Coach Emily’s Story

When I started investing in real estate, I had just graduated from college. I was looking for a way to succeed in life without having to work for a big corporation for 40 years. I was scrimping by on my small savings because I wanted to prove to my parents that I really could make it on my own. That’s when I first got started with my investing. Over the next two years, I bought dozens of properties using other people’s money and have been involved in hundreds of deals since. If a new college graduate like me can start with nothing and become a real estate millionaire in less than four years, then you can do the same thing!

It doesn’t take money to make money. It takes specialized knowledge of a profi table niche that you apply with disciplined and passionate efforts over time, taking care to learn and to improve along the way. Even if it really did take money to make money (which it doesn’t), no one said it takes your own money to make money. One of the advantages of investing in foreclosures is that it’s easy to use other people’s money to make money. You can potentially tap into thousands of dollars in profi ts created through buying properties using other sources of funding.

Myth #2: You Need Good Credit to Borrow Money

We can hear you saying, “Yeah, but we need good credit to borrow money so we can make money investing in foreclosures.” This is true if your only source of funding is from traditional lenders. In this blog you’ll learn seven other ways to fund your way into a deal with someone else’s money—no matter what your credit is like.

Success Team—Peter’s Story

I’ve had a hand in hundreds of real estate deals—acquiring interest in millions of dollars worth of real estate—yet I’ve only applied for funds through a conventional lender for a small handful of loans in all those years. If I can do this, you can too. It’s just a matter of learning the real-world secrets that successful investors have mastered.

For example, I bought and made more than $250,000 in profits from a fi ve-bedroom, three-and-a-half-bath house. The seller agreed to act as my bank and carry back all the fi nancing I needed to buy that property after a small down payment. He carried back over $400,000 without ever once asking to check my credit. Was the seller unsophisticated? Was I taking advantage of him? No. He had a net worth several times greater than mine (he was a real estate investor in his seventies and I was just 38 years old at the time). He simply regarded this as a win-win situation.

More to come in Three Biggest Myths About Investing In Foreclosures Part-2

Nothing she had learned over the previous 15 years of corporate life had prepared her for the harsh realities of being on her own. Sarah vowed that never again would she depend on a job or corporation for her income. She decided to start investing in real estate. A few months after she made this decision, she came to a workshop we hosted in San Diego. She sat right in the front row and took page after page of notes. Hungry to learn how to build wealth by starting up a real estate investing business, she asked probing questions at every break. How did things turn out for Sarah?

During her first 12 months of investing, she completed 10 deals and earned more than $150,000 net profit. Today, she specializes in buying preforeclosures and foreclosure properties in her hometown and earns a lot more money than when she first started investing. I’m not going to tell you she had it easy—just as many of you won’t have it easy—but it can be done. And you are the one who can do it.

Over the past decade, as part of the Mentor Family, I’ve been blessed to have helped launch the investing careers of thousands of people across the country who, just like you, come to this simple post and began a journey that continues. In fact, over that time, our students have bought and sold more than $1 billion of real estate. We know we live in a cynical world in which friends and family may say it can’t be done. But we’re here to tell you that if tens of thousands of our students can do it, you can too.

Mark, a pilot for a large commercial airline, made more than $100,000 from his first foreclosure deal. His greatest dream was to make enough money with his real estate investing that he could quit his airline job and teach high school band classes. Music was his passion and his drive. Mark has now completed many more deals and created a whole new life for himself. If he can have the courage to successfully chase his dreams, you can too.

Laura, a nineteen-year-old woman, was recovering from a broken back when she first began learning about investing. She spent two months listening to borrowed investing course tapes and reading investing books as she convalesced. Two months later, she bought her first investment property and was off and running. Five years later, her real estate business generates $40,000 a month of gross revenue, and her net worth is $1.5 million. If this young woman with no experience can fi nd a way to become successful, so can you.

Randy is a beginning investor from Hawaii. He finally found his answer for all those people who kept telling him “it couldn’t be done” when he made more than $60,000 on his first foreclosure deal. If Randy can ignore negative influences and realize a huge new world of opportunity, you can too. Michael learned that his company was about to lay him off. With a wife who was pregnant with their first child, this was a major wake-up call for him. While Michael’s company decided not to lay him off, he swore that he would never put himself and his family in a financial position that vulnerable again.

He followed the systematic advice and strategies you’ll learn about in this blog. Michael completed eight deals and made $405,000 in cash profits. You, too, can use the same strategies as your proven wealth vehicle to take back control over your own financial future and become fiancially free. Michael is now also one of my coaches for our Mentorship Program.

WHY THE TIME IS NOW

There has never been a better time to take control of your financial destiny and get out of the rat race. All across the United States, foreclosure rates are climbing like rockets and bursting onto investors’ radar screens. Now is the time to cash in on these unprecedented bargains for yourself and help other people at the same time. Don’t miss out on big opportunities to make money investing in foreclosures.

The following indicators have helped drive the foreclosure rate up more than 400 percent over the past 30 years in the United States. And it’s only getting higher. Personal bankruptcy rates are up 400 percent from what they were 40 years ago. Gambling as a percentage of the average person’s disposable income has increased by more than 700 percent over the past 40 years. In fact, online gambling has doubled in the last 12 months! Consumer debt is at an historic high, while savings rates are at historic lows. For the past 30 years, the number of people not covered by health insurance has climbed above 50 percent.

(Source: Federal Deposit Insurance Corporation Division of Research and Statistics)

According to the Mortgage Bankers Association of America, 4.41 percent of all residential housing was in various stages of preforeclosure or foreclosure by the end of August 2006. This number has doubled over the past several years. That rate is even higher when you look at subprime and FHA loans, which both had delinquency rates of roughly 12 percent as of the first quarter of 2006. Twelve percent! And these rates are climbing, in 2009.

The next time you drive to your local supermarket to shop, you’ll probably pass 1,000 homes. Of these, statistically speaking, 44 are in preforeclosure or foreclosure. That means in your neighborhood within a few minutes’ walk, four to fi ve of your neighbors are delinquent on their loans and in danger of losing their homes to foreclosure. These people need your help. And as you help them, you’ll earn a healthy profit.

If your approach to finding properties involves people contacting you, then you’ll need some method of keeping track of them. For this, I recommend a ream of three-hole punched paper, eight divider tabs, and a three-ring binder that will stay in your file tub when not in use. Label your tabs as follows:

• Preliminary Review

• Prospects

• Referrers

• Suspects

• Can’t Help Now

• Foreclosed

• Avoided Foreclosure

• Other Professionals

If you keep track of your whole life on a computer (like I do), then set up the labels above as categories in Outlook or whatever other address or date software you use. Whatever you use, you must have the ability to enter pretty much unlimited notes in some field, and you must be able to sort by categories. You’ll notice that the tabs do not include one for active properties. That’s because, once you’ve decided that you want to pursue a particular property, you should devote a separate folder to that one.

All papers, notes, and notices relative to that particular property will go in the folder. (More on what goes into the folder comes in later chapters.) If a borrower has more than one property, create more than one file. All of the files can be stored in a plastic container that can sit on your desk, get tossed in the car, or be placed on the kitchen table. It’s portable and indestructible— a great combination.

Get into the habit of making notes after you talk to people, and then dropping those notes into the file. Make sure you put a date on your notes. After a few weeks, it gets surprisingly difficult to remember exactly when you obtained certain information. Sometimes it’s critically important to know what you knew and when you knew it.

Never throw away any of your papers.

You’ll want to read through all of them from time to time in order to get a sense of what things work for you and what methods don’t work. For example, if you tally your lead sources, you might find that one person sends you tons of leads, but they never turn into anything. Another person sends you very few, but they all ended up in purchases. You might notice that owners of luxury homes either file for Chapter 11 Bankruptcy or sue their lender under some theory, stopping foreclosures. (I’m not saying this is common—it’s just an example I made up.) If you see something like this happening time and again, you might decide it’s a waste of time to work with upper bracket (luxury) homes.

Meet Jim

In the following lines, you’ll meet another workout specialist—Jim. He’s fictional, but based on some very real people and their everyday experiences in this industry. Jim will stay with us throughout this blog, as he searches for a good property and analyzes which options are best for him. In order to understand his motivations and restrictions, we need to know a little bit about Jim. He has been out of school for about three years He has a good job as the assistant manager at an auto parts store. He also has a steady girlfriend he hopes to marry one day. But, there are rumors that Jim’s employer might be shutting down several locations and laying off all the employees.

Jim needs an investment that isn’t full-time, will grow over the years, and that he can manage on some sort of touch-it, feel-it basis, as opposed to stocks and bonds. He also needs something that will not require very much money in a down payment. He has three foreclosure opportunities.

All of them have a first mortgage in default, with a payoff of $85,000.

Property One is three acres of land with a 2,000 square foot building rented out to the United States government on a twenty-five-year lease for use as a post office. The rent is $1,000 per month, but increases each year in order to keep up with inflation. In the trade, we say the building has a “credit tenant,” which means a national tenant with great credit.

Property Two is virtually identical, but is rented out to a young chiropractor. She has a two-year lease for $1,000 per month. She might have a great credit score, but she’s not called a “credit tenant.” Property Three is a modest starter home within walking distance of a good elementary school. It has some deferred maintenance (neglected repairs), but it is essentially a sound structure. Jim could either live in it himself or rent it to someone else for about $1,000 per month. In order to evaluate these properties and make the right choice for which one to buy, Jim needs to:

• engage in some introspection to define his goals and needs;

• learn real estate concepts and analytical tools;

• discover how to evaluate other people’s motivations;

• create some checklists for prudent investing; and,

• put it all together to make the right decision.

By the time he’s ready to make good buying decisions, you will be, too.

Help Others

An important key to your success is recognizing when people can be helped by your specialty and when they might need to see some other specialist like a bankruptcy lawyer.Good professionals with good reputations aren’t greedy. They don’t try to grab every single passerby and turn them into a customer or client. Successful professionals aren’t stupid either. They don’t waste a lot of time trying to solve problems with their particular specialty when it is never going to work. By learning to recognize the symptoms that might require another type of specialist, you can make a meaningful recommendation for someone else.

Why make recommendations? Besides being helpful and costing you nothing, it gives you legitimacy. Face it, everybody knows that the doctors, lawyers, accountants, plumbers, electricians, and auto mechanics all know their colleagues in town, and what’s good and bad about each one. Being willing to make a referral to another workout specialist helps establish you as a member of that community. An added benefit is that these other people will refer business to you if they’re not able to help someone by their particular specialty.

Your First Steps

Right now, the only thing you have to do is practice thinking about yourself as a trained professional—a workout specialist. As a professional, you need business cards. People just don’t think you are legitimate without them. Decide the information you want to appear on your business card. I would suggest your name, the title

“Workout Specialist Real Estate,”

or

” Professional Foreclosure Buyer “a cell phone number, and an email address.

Get Focused

Whether you are looking for a personal residence or an investment, you need to set up some parameters. If you don’t know how much something will cost, you don’t know if you can afford it or not. You have to prepare a budget. Your budget will help you in many ways. It will focus your thoughts on the steps involved in meeting your goals. It will help you remember what types of things you need to document, so you can write them off your taxes as business expenses. It will also help you determine what can be performed by other people and whether it makes sense to pay someone to perform particular chores, such as gathering names and addresses of potential referrers.

Some of the things you should budget for include the following.

• It will cost money to set up a data management system—either software or some sort of paper filing system. Be sure to include the time necessary to set everything up and to learn how to use software.

• You will have to spend time identifying possible referrers. u You will have to spend money on paper and postage sending letters to referrers.

• There is a cost for the mileage and time you spend visiting with referrers.

• You will want to invest in thank-you cards and postage.

• Seminars will have expenses as well—preparation time, seminar time, and the cost of a meeting room. (Many times you can get meeting rooms free at your Chamber of Commerce, community college, or church.)

• Snail-mail newsletters will cost you preparation time, plus the cost of paper, printing, and postage.

• There is no monetary expense for email newsletters, but you MUST keep some indication in your files that the person has given you permission to send email.Otherwise, you’re a penny-ante spammer.

• It will cost money to place ads in a community newspaper or thrift paper.

• You will have to spend time scoping out foreclosures and other legal notices or filings.

You might want to periodically compare your actual expenses—time and money—against what you thought they would be when you made your budget. That way, you can make changes if necessary.

Keep Track of Information

Even if you’re doing this just to buy a personal residence and nothing more, you still need to be as efficient as possible. Doing so will enable you to look at a lot more properties and find the one that is best for you, instead of settling for what you’re able to track on top of your head. Plus, things start to get confusing when you’re looking at several properties. I don’t want you to get confused and discouraged—you really can do this, but you need to be organized.

Systems and Procedures

I’m a big believer in systems and procedures. A system is a way of doing things so you don’t waste time. A procedure is a task that gets done every time, without fail, and fits into your system in a certain way. Three-ring binders with tabbed dividers, file folders in a plastic tub, and computer programs set up in a certain way—are all systems. For example, my systems usually involve putting a person’s name in Microsoft Outlook, assigning a category of something like “foreclosures,” and then putting enough information in the notes field to make searching easy.

Every time I do something in regards to that person, I open their file in Outlook and type in notes. I also have a directory called “Foreclosures” and subdirectories with people’s names. If a document fits into more than one subdirectory, I file it in all relevant places. Another system might be as simple as a three-ring binder with tabbed dividers for all your information and some blank pages for spur-of-themoment notes. Some people work well with labeled file folders, while others prefer shoe boxes.

The point is to set up a system that’s comfortable for you. If it’s not comfortable and designed the way your mind works, then it’s useless. Some of my friends have systems that involve nothing more than stacks of paper on the floor. It makes me crazy, but they can always find what they need. Look around you, see the ways you successfully keep track of things, and adapt that system to your foreclosure work. A procedure is a task. Filling out a form is a procedure. Always corresponding by email and then printing and saving your emails is another one. I’ll be giving you lots of procedures in this foreclosure blog. If they need a little adapting to fit into your system, then do it. There’s nothing magical about my forms, as long as you obtain the information and do the tasks you need.

This is where you come in. I want you to truly understand your role in the foreclosure process and to see that you have the ability to be a hero, a champion, a doer of good deeds, and make money buying foreclosure or find a personal home of your own. In order to feel good about the things I am going to show you and about embarking on your journey to personal security through real estate acquisitions, you have to see life through the eyes of someone facing the loss of their own dreams. If your life has been relatively stress-free, then take my word for it—people threatened with the loss of their property, their dreams, their safety, are usually paralyzed with self-recrimination, fear, anger, and isolation. Your job is to cut through all of that, and give them knowledge, courage, hope, and dignity.

• Knowledge regarding what to expect, so that fear of the unknown isn’t added to their other burdens.

• Courage to face the problem and make responsible decisions regarding the best path.

• Hope that, although something bad is happening, it isn’t the end of the world.

• Dignity in the understanding this could happen to anyone, and the measure of a person’s worth does not come from their disasters, but in how they’re confronted.

Of course, in doing this, you still can make money in the process. If this sounds hokey to you, then you have the wrong attitude. Handled properly, you will be a hero, just like the other professionals who rise to the challenge of helping others manage and control crises. You are going to be a trained professional when you finish this blog, follow the advice in it, and put into practice the tools and habits that will lead you down the road to personal wealth and security. Even if your goal is only for one property (a personal residence) you’ll still be a trained professional.

Become a Professional

As a professional, you need a name for yourself—something similar to doctor, lawyer, network engineer, or electrician. I would suggest that your name for yourself is workout specialist.Workout specialists all have in common the Four R’s:

• Reduce debt or debt service (by sharing knowledge)

• Remove anxiety (by giving courage to act)

• Restore respect (and with it, hope and dignity)

• Receive a fair compensation in return

As a workout specialist, you will help liquidate real estate assets in order to reduce debt, remove anxiety, restore hope and dignity, and receive a fair compensation in return. There’s nothing strained about that. Even if your only goal is to find a home that you can buy at a discount for yourself, you will be no less of a workout specialist by the time you read this post and put it into practice. You’ll be able to find and purchase that dream home using the concepts and techniques in this posts.

Then, even if you never buy or sell another piece of property, you’ll still be able to give advice to friends and relatives, or provide encouragement to someone who wants to enter this field as a moneymaking venture. I’m willing to bet that once you see how easy this is, you will use the same principles to buy newer or larger homes over the years, and perhaps even to accumulate a few rental properties to provide for your children’s college education and for your retirement years.