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Purchasing distressed properties during the pre-foreclosure phase of legal action is a great idea for real estate investors. During this time, you can work directly with the homeowner and this saves you a great deal of headaches, hassles, and legal red tape. This is the only time during the foreclosure process that you can inspect the property freely, make an offer, and close the deal much like you would in a traditional real estate transaction. But unlike a traditional sale, buying pre-foreclosures allows you to purchase property significantly under value.

Once you have located a good property investment that is being foreclosed upon, you will need to contact the homeowner to begin negotiations. This is the toughest part of buying pre-foreclosures because emotions are very high at this point in the homeowner's life. Your first contact should be made delicately with the homeowner's vulnerable position forefront in your mind. Keep in mind that he is likely besieged by phone calls from creditors and will likely view you with more than a little skepticism.

Since the homeowner is likely screening his calls, you might find it difficult to get in touch with him. You could start the buying pre-foreclosures process by contacting the homeowner by mail. Letters are less threatening, and if they are worded the right way may get you an appointment with the homeowner.

Follow these letter-writing guidelines for buying pre-foreclosures:

' Make sure the envelope is nicely hand written so it looks personal and not like another bill collector. Letters that are too professional looking may also be a turn off. If you want the stressed-out homeowner to even open your letter, it must look non-threatening.

' Word your letter in a friendly way that makes the homeowner feel like you are trying to help him. Outline exactly what you can do for the homeowner. When buying pre-foreclosures it is common for the investor to pay off the loan and give the homeowner a little cash to pay off some other bills.

' Give the homeowner a way to contact you at his convenience. Never threaten or pressure. If your letters get no response, simply increase your efforts by sending more letters, but no more than two per month. A couple of phone calls might also do the trick, but only begin these as follow up to mail correspondence.

Once you have made contact with the homeowner, continue to be sensitive to the homeowner's position. When buying pre-foreclosures you should never judge or treat the homeowner in a condescending manner.

A more effective strategy is to meet with the homeowner face-to-face. While this sounds daunting, it is by far the best way to close the most deals. Learn how to approach the homeowner during this time, and how to get them to work with you, and you will get far more deals.