Properties in foreclosure can be incredible investments. Whether you buy a home in pre-foreclosure, when it is being sold by public auction or trustee sale, or directly from the lender (in the case of real estate owned or REO properties) you have a genuine chance to pick up a property for much less than its market value. So how do you find foreclosure properties in the first place?

Well, there are two main ways, depending on the state in which the property resides. In states where foreclosures may be conducted without court supervision, lenders will issue defaulting mortgagors with a notice of default. This notice is filed with the county recorder in the county where the home is located. Helpfully, many county recorders have established searchable websites where you can find listings of such notices.

In "judicial states" - where foreclosures are conducted under court supervision - a "Lis Pendens" rather than a notice of default is the initial foreclosure document to be issued. However, because such a document technically reflects a court proceeding, it may be kept with court records rather than filed with the county recorder. Also, because a Lis Pendens is not strictly a loan default notice, but rather a notice of pending legal action, you may have to hunt through many irrelevant Lis Pendens before finding one relating to a property in foreclosure.

Searching a county recorder's database for notices of default can sometimes be relatively straightforward. If you can search by "document type" you can bring up all the notices of default, which will give you the relevant owner names and document numbers. You may, or may not, however, be able to find the details of the loans and properties to which these notices relate. In that case, you'll need to make a note of the relevant owner names and document numbers, and take this with you to the county recorder's office, in order to review the corresponding documents (i.e. notice of default or Lis Pendens, as the case may be). These will give you the details you need: the loan details and the address of the property in foreclosure.

Armed with that information, you can then visit all the properties of interest and assess which, if any, look like potential investments. An initial visit may rule out some properties, while others may justify you contacting the owner in order to meet them, value the property, and potentially make an offer.

Although the steps involved in finding foreclosures are conceptually simple, don't be misled. If all the information you need (i.e. the actual notices of default or Lis Pendens) are not readily available online, some legwork will be required. But the good thing about that is that you'll probably have less competition from the other property investors looking for foreclosures in the same area. A good percentage of them won't be prepared to visit the county recorder's office or even to hire someone to do so. Or they'll be slow to take action. If you, on the other hand, are willing to do this - or employ someone to do it - you'll have an advantage.

More info on your stop foreclosure information search:

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