Hello fellow real estate investors and entrepreneurs.

I wanted to provide you with a checklist of “buy signals” that experienced pre-foreclosure investors look for and find when evaluating an investment property. These are sure signs that you’re on your way to buying your next income property at a substantial discount.

You don’t need to have all seven in place, but when you find one, the others are usually close by.

Buy Signal #1: Homeowner Is Behind On The Mortgage Payment
This is an obvious one, but I thought it needed to be included in the list. Most homeowners who fall behind on the mortgage payment cannot catch up and usually lose the property at foreclosure auction.
When homeowners can’t affored to pay the mortgage, they cannot afford to maintain the house or the grounds either.

Buy Signal #2: Grass Is Overgrown
After many years of running the streets as a pre-foreclosure investor, I learned to pick out (in an instant) the house in foreclosure as soon as I turned onto the street.
Overgrown grass is a sign of neglect.

Buy Signal #3: Windows Are Busted Out
Busted out windows are usually found in vacant or abandoned properties.
When the owner moves out, sometimes the neighborhood kids like to get together and pull out their personal rock collections and proceed to work on their throwing motions. This usually involves picking out the right target.

Buy Signal #4: Rotten And Exposed Wood
A house that has extensive rotten wood on the exterior has probably been neglected for many years. It’s shocking sometimes what people will put up with when it comes to sub-standard living conditions.

One time I met with a seller who had a gigantic hole in his kitchen ceiling. The whole was so big that you could see clear up to the sky. I met with the seller for an extended period of time discussing the situation with the house.

Not one time did the homeowner say anything about the huge hole in the roof. This was a very strange exchange.

Buy Signal #5: No Garden Hose
I have found this one item in the list to be more telling than any of the others.
For some reason, whether or not the house had a garden hose connected to the outside faucet told me if it was occupied or vacant.

If the green garden hose was still connected, the house was usually occupied. If the hose was missing, 9 times out of 10, the house ended up being vacant.

Buy Signal #6: No Furniture
Usually when you suspect that a house is vacant, you peer into the nearest window to confirm your gut instinct.
You’ll know in an instant that the seller has moved on if the furniture has been removed.

Buy Signal #7: Neighbors Haven’t Seen Them
Usually there will be a neighbor or two that can tell you something about the seller.
If the homeowner could not fix the problem with the mortgage, the neighbors usually knew all about it. They are sometimes a very good source of information