How to Effectively Build a Foreclosure List
The moratorium is ending at the end of this month and we are likely to see more foreclosures on the horizon. With that being said you’ll want to start advertising to homeowners that are foreclosing. Moreover, you’ll want to ensure you are reaching out to the appropriate homeowners and touch them repeatedly with your advertising. In order to reduce waste marketing and to effectively spend your budget wisely, you’ll want to filter your foreclosure list.
How to Filter your Foreclosure List
It will be more effective to have a small list that you can advertise to multiple times than a large list that you advertise to only once. Therefore, it’s going to be important to filter your foreclosure list so that only homes that fit your criteria are marketed.
Filter Foreclosure List by Target Area
A foreclosure list can be quite long if you are not filtering it. A great way to start is to filter by your target area. This can be as simple as selecting a few zip codes or a certain distance from your office. If you are looking for a list of 500 to advertise to and the zip codes you have selected only produce 400, you can increase your coverage area. Inversely, you can remove some zip codes in order to reduce the amount of homes in your foreclosure list. However, if you do not want to compromise on zip codes, you can use the additional filters shared below to narrow your list.
Filter Foreclosure list by Property Details
There will be certain types of homes that will be easier to sell than others. For example, homes that are at least 1,000 sqft or more have a better chance of selling and are likely to be in more desirable areas than homes that are less than a 1,000 sqft. In addition, homes that have at least 3 bedrooms will also be easier to sell than homes with 1 or 2 bedrooms.
This is a quick and easy way to filter your list if you do not want to compromise the amount of people in your target area.
Filter by Price Range
Another way to filter your foreclosure list is by price range. This is going to be useful because there might be homes that might be too expensive and there’ll be other properties that are priced low, that it’ll be a warzone. Instead, look for a good median price and give that range a 50% plus or minus range. Essentially, if you are looking for homes at the price of $200k, your range will be $100k – $300k.
Ensuring your price range isn’t too high or too low will help you narrow your foreclosure list to homes that will more likely yield you profit.
Filter by Type of Property
If you are a return reader, you know that the best properties to invest in are single detached family homes. Therefore, you’ll want your filter to only include this type of property, while excluding mobile homes and condos. Mobile homes are more difficult to flip and condos are the first ones to go down during a market decline and the last ones to go up when home values are rising.
Filter by Equity
This is a very helpful tool when it comes to narrowing your foreclosure list. You can determine what type of home you’d like your list to contain based on how much equity is in the home. You’ll usually want at least a baseline of 20% equity in the home, the more the better. Therefore, if you are still looking to shrink your foreclosure list, you can increase your filter setting for homes with more than 30% or even 40% equity.
Filter by Removing Homes with Second Liens
There is a right way and a wrong way to buy real estate. You’ll want to filter homes with second liens because it’s unlikely the home has much equity. In addition, there are low chances to getting a discount or eliminating the second loan. In this case, you’ll want to completely remove homes with second liens from your foreclosure list.
Now that you have the knowledge to narrow down your search, you can begin advertising to your foreclosure list. Remember, frequency is important, so advertising to your list multiple times is going to be more pertinent than having a large list. If you are interested in learning how you can automate your marketing, get started with our Unlimited Funding Program.