The key to your success in buying property in foreclosure is going to be organization. For this you need to have foreclosure investing software with a database that provides you with all the information that can enable you to locate in your area properties that have large equities.The software should allow you to choose about a dozen candidates, of which you take photographs and enter them into the software.

Your first step is to contact the owners of the properties. Since 9 out of 10 foreclosures are single family residences, most of the owners can be found at the properties.You can reach owners in different ways.The most obvious is the telephone – if it is listed and if it is still connected. But generally, your most efficient methodology will be a letter writing campaign. Using the data from your foreclosure investing software, you will find that seventy percent or more properties will have equity at some level. You should send letters to all of these people. Further, you will need to send letters repetitiously. Keep in mind that it may take numerous letters before you can attract the attention of an owner.

Experience has shown that a low key approach, whether in person or by mail, is your best course. Your goal is to have a meeting in which you can discuss their problem and how to resolve it. The usual approach is for you to offer a sum of money in addition to paying the existing monthly payments that are overdue. You have to leave a significant profit for yourself, and the best way to explain this is, that if you take over the mortgage, pay the owner money, fix up the property for sale, and wait for it to sell, you have to receive a profit for your efforts and risk.

Using your foreclosure investing software, you are able to find properties with equity. However, there is also a way to make money with properties that have no equity. You do this through a “short” sale with the lender, that is, by paying them off at an amount lower than the existing balance. In a short sale you will also need the cooperation of the buyer and normally he will receive nothing, except relief from the foreclosure. For many this is enough, because of the extreme pressure they have been under.

In a hot market in properties this is extremely difficult because the lender has no motivation to reduce the loan. But in a soft market, some lenders may be interested in receiving a lower sum and walking away from the foreclosure. They would do so because foreclosures usually take about six months, causing lenders significant costs, as well as the fact that lenders have to pay large expenses to fix and sell properties.