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Illinois Real Estate News and Resource Center

Welcome to the news and resource center where the ilFLS provides everything that the foreclosure investor needs to become successful in an ever expanding always improving list. Also get latest news from the local Chicago Area foreclosure and real estate market that affects you, the investor...

Foreclosure Investment Strategies

  1. Birddog- Basically, this investment strategy involves going directly to the homeowner in foreclosure to negotiate a deal to purchase their home. This strategy works best after the judgment is entered (see foreclosure process in Illinois) and time really is of the essence, i.e. an auction date looming.
    • Pros:
    • If you are a good salesperson, you can control your own destiny in dealing with the homeowner in need.
    • At this stage of foreclosure there are alot of properties to choose from.
    • You get familiar with a property so in case it does go to auction you have knowledge of the condition of the home.
      Cons:
    • Lets face it, knocking on the door of a stranger in a difficult financial situation is stressful.
    • Don't believe the hype. Even the best salesperson in the world is going to fail 90% of the time doing this. Be prepared for rejection.
  2. Organized Birddog- The organized birddog combines the door knocking with modern technology by consistently sending out mass mailings, trying phone calls and other ways to contact the homeowner
    • Pros:
    • You increase your chance of landing a property if you stay in constant contact with a homeowner. Homeowners who may not respond to someone at their door may respond to a professional letter or a sales call.
    • Using multiple methods to contact the homeowner breaks up the stress of rejection from going door to door.
      Cons:
    • Only the organized survive in this strategy. The one week you don't send a letter is the one when the homeowner was ready for help.
    • Do mailings actually work??? I am sure that some do but don't make simple mistakes like preprinted envelopes. Always handwrite on the envelope or it won't even get opened.
  3. Auctions- Some people make their living going to auctions and purchasing properties below market value. Their are two ways to approach this strategy. One is to find someone extremely knowledgeable about auctions and form an 'investment' pool of money to invest in the auctions with that person. The other strategy is to go to the auctions, do the research, put up the money, and buy the properties yourself.
    • Pros:
    • Buying a property below market value.
    • Just going to an auction gives you great insight into the real estate and foreclosure market.
    • There is not as much competition as you think!
      Cons:
    • Alot of research beforehand on the properties you want and the auction ends up being continued or cancelled.
    • You are bidding on property in as-is condition with no guarantees.
    • Auctions require 10-25% down on the amount you bid in the form of a cashiers check right away and the balance paid off in 24hrs