01_122181 ffirs.qxp 4/25/07 7:50 PM Page i Foreclosure Investing FOR DUMmIES‰ by Ralph R. Roberts with Joe Kraynak 01_122181 ffirs.qxp 4/25/07 7:50 PM Page iv 01_122181 ffirs.qxp 4/25/07 7:50 PM Page i Foreclosure Investing FOR DUMmIES‰ by Ralph R. Roberts with Joe Kraynak 01_122181 ffirs.qxp 4/25/07 7:50 PM Page ii Foreclosure Investing For Dummies® Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2007 by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permit- ted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online at http:// www.wiley.com/go/permissions. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book. LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NO REP- RESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CON- TENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CRE- ATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CON- TAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FUR- THER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFOR- MATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ. For general information on our other products and services, please contact our Customer Care Department within the U.S. at 800-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002. For technical support, please visit www.wiley.com/techsupport. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Control Number: 2007925990 ISBN: 978-0-470-12218-1 Manufactured in the United States of America 10 9 8 7 6 5 4 3 2 1 01_122181 ffirs.qxp 4/25/07 7:50 PM Page iii About the Authors Ralph R. Roberts’ success in real estate sales is legendary. He has been profiled by the Associated Press, CNN, and Time magazine, and has done hundreds of radio interviews. Ralph is a seasoned professional in all areas of house flipping, including buying homes, rehabbing, and reselling them quickly and at a handsome profit. He has penned several successful titles, including Flipping Houses For Dummies (Wiley), Sell It Yourself: Sell Your Home Faster and for More Money Without Using a Broker (Adams Media Corporation), Walk Like a Giant, Sell Like a Madman: America’s #1 Salesman Shows You How To Sell Anything (Collins), 52 Weeks of Sales Success: America’s #1 Salesman Shows You How To Close Every Deal! (Collins), REAL WEALTH by Investing in REAL ESTATE (Prentice Hall), and Protect Yourself Against Real Estate and Mortgage Fraud (Kaplan). Foreclosure investing is one of Ralph’s many specialties. For over 25 years, he has personally worked in the foreclosure arena, purchasing preforeclosures directly from homeowners, buying foreclosure properties at auction, and often helping homeowners dodge the foreclosure bullet and retain posses- sion of their homes. In Foreclosure Investing For Dummies, Ralph reveals his unique win-win approach to investing in foreclosures. Ralph also serves as Official Spokesman for Guthy-Renker Home, a company dedicated to equipping home buyers, sellers, and real estate professionals with the tools, information, and community setting they need to achieve mutual success. Visit www.HurryHome.com and www.GuthyRenkerHome.com to experience the exciting innovations that Guthy-Renker Home offers now and is planning for the future. To find out more about Ralph Roberts, visit www.AboutRalph.com. Joe Kraynak is a freelance author who has written and co-authored dozens of books on topics ranging from slam poetry to computer basics. Joe teamed up with Dr. Candida Fink to write his first book in the For Dummies series, Bipolar Disorder For Dummies, where he showcased his talent for translating the complexities of a topic into plain-spoken practical advice. He then teamed up with Ralph to write the ultimate guide to flipping houses — Flipping Houses For Dummies. In Foreclosure Investing For Dummies, Joe and Ralph join forces once again to deliver the definitive guide to profitably investing in foreclosures . without selling your soul. 01_122181 ffirs.qxp 4/25/07 7:50 PM Page iv 01_122181 ffirs.qxp 4/25/07 7:50 PM Page v Dedication From Ralph: To the many investors and Realtors I’ve worked with, trained, consulted, and coached who have made investing in foreclosures both suc- cessful and rewarding. From Joe: To the investors who use our book not only to build wealth in real estate, but also to assist distressed homeowners and build stronger communities. Special thanks to Paul Doroh, sheriff-sale and cash buyer for Ralph Roberts Realty, whose priceless insights and real-world experiences transformed our silver into pure platinum. Paul is a mighty fine writer, even by Joe’s standards, and without his late inning relief, this book would not have been possible. Authors’ Acknowledgments Although we wrote the book, dozens of other talented individuals con- tributed to its conception, development, and perfection. Special thanks go to acquisitions editor Lindsay Lefevere, who chose us to author this book and guided us through the tough part of getting started. Jennifer Connolly, our project editor, deserves a loud cheer for acting as a very patient collaborator and gifted editor — shuffling chapters back and forth, shepherding the text and photos through production, making sure any technical issues were prop- erly resolved, and serving as unofficial quality control manager. We also tip our hats to the production crew for doing such an outstanding job of trans- forming a loose collection of text and illustrations into such an attractive bound book. Throughout the writing of this book, we relied heavily on a knowledgeable and dedicated support staff, who provided expert advice, tips, and research, so we could deliver the most comprehensive and useful information. Lois Maljak proved invaluable not only as a resource person but also as the com- munications hub for the flurry of files and e-mail messages flying back and forth on a daily basis. Thanks also to Ralph’s number-one virtual assistant Kandra Hamric, who helped us tie up all the loose ends and put the appendix together. We owe special thanks to our technical editor, accomplished real estate pro Blanche Evans, for ferreting out technical errors in the manuscript, helping guide its content, and offering her own tips and tricks. 01_122181 ffirs.qxp 4/25/07 7:50 PM Page vi Publisher’s Acknowledgments We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/. Some of the people who helped bring this book to market include the following: Acquisitions, Editorial, and Composition Services Media Development Project Coordinator: Erin Smith Project Editor: Jennifer Connolly Layout and Graphics: Claudia Bell, Carl Byers, Acquisitions Editor: Lindsay Lefevere Brooke Graczyk, Joyce Haughey, Copy Editor: Jennifer Connolly Stephanie D. Jumper, Heather Ryan Technical Editor: Blanche Evans Anniversary Logo Design: Richard Pacifico Editorial Manager: Michelle Hacker Proofreader: Aptara Editorial Supervisor: Carmen Krikorian Indexer: Aptara Editorial Assistants: Erin Calligan Mooney, Joe Niesen, Leeann Harney Cartoons: Rich Tennant (www.the5thwave.com) Publishing and Editorial for Consumer Dummies Diane Graves Steele, Vice President and Publisher, Consumer Dummies Joyce Pepple, Acquisitions Director, Consumer Dummies Kristin A. Cocks, Product Development Director, Consumer Dummies Michael Spring, Vice President and Publisher, Travel Kelly Regan, Editorial Director, Travel Publishing for Technology Dummies