Obviously it’s hard to find homes about to go into foreclosure, or pre-foreclosure homes. Pre-foreclosure is the period before the notice of default is filed and the distress becomes public knowledge. In fact, this is the hardest thing about investing in this area.

You need to develop a simple, orderly system that collects all the information so you can use your detective skills to find the clues that signal imminent foreclosure. You need to find them in the early stages to make the most of them.

Firstly, you need to start with the classified advertisements in your local newspapers, paying special attention to wording that indicates a motivated seller, such as must sell, under market, under appraisal, take over payments, illness, death, motivated seller, nothing down, owner carry or rent to own. It’s a numbers game, you need to look at many properties to find the gem you’ve been looking for. It’s vital that you call and inquire about any property that looks like it might be a potential investment.

You should work out what property owners in distress are looking for, so you can give it to them to help them fix their situation. I have even run ads in classified sections of newspapers to ask owners who are approaching foreclosure to call me.

With the rising number of defaults, chances are either someone you know needs help or someone they know does. Print up some simple business cards and hand them out! Let all your friends know that you’re looking for them and you’ll be surprised.

Drive around, looking for homes that are not being maintained, for rent signs, FSBO signs, vacant homes and code enforcement tags. Keep track of each property that might be a prospective target and write letters to each of them. Vacant properties owners can be found through the assessors office. Neighbors can also be an excellent source of information about what is happening in their neighboring homes, so talk to them.

It can take a lot of work to find a house in pre-foreclosure, but in the end if can reward you with a nice profit.