“The minute I opened my mouth, she slammed the door in my face!”

It’s not altogether uncommon to hear stories like these from new—and exasperated—real estate investors when they personally reach out to a homeowner facing foreclosure. Fairly frequently, when just starting a career in real estate investing, novice investors don’t understand why they end up on the receiving end of a distressed homeowner’s difficult behavior. After all, these investors want to help the homeowner who is in over their head financially and missing mortgage payments. But that’s not how the homeowner may see it. To them, the investor must have gotten embarrassing inside knowledge about their financial situation and is just another predator out to take their home away.

How to Approach Distressed Homeowners Facing Foreclosure as a Real Estate Investor

Understanding the Distressed Homeowner’s Perspective

Typically, a homeowner becomes late on their mortgage because of a difficult event in their life. Perhaps they have experienced an unexpected job loss, health problem, or divorce. Sometimes, an adult child will inherit a house after their parent passes and they are not prepared to take on the extra mortgage. Although rarer in our current climate of economic recovery, some homeowners may still be struggling because of their sub-prime mortgage or their negative equity from the housing bubble.

Whatever the reason, homeowners obviously do not want to be displaced. Often, they consider their particular circumstance temporary and hold out hope that they can turn things around during the lengthy foreclosure process. Some experience a sense of denial about what is happening and put their head in the sand. These homeowners are emotionally attached to their properties, having worked hard for them, and want to hold on as long as possible. Accepting a short sale offer from someone who thinks they’ve found a great investment property is a last resort option.

Typical Approaches for Investors

When you find a property that you are interested in, it can be difficult to know how to market to the distressed homeowner and get their attention. They may be in denial, distraught, or even ashamed and putting their head down. Even more, they may have already been approached by other investors with the same “sales pitch.” And, if they weren’t as tactful as you are, this could make your proposal even more difficult. Regardless, there are lots of ways to approach a distressed homeowner with compassion and respect, which will increase your chances of being able to actually explain how you could provide a win/win solution for them.

Send a postcard

Mailing is the most popular method for an investor to contact a distressed homeowner. It’s an efficient, non-threatening, and unassuming way of communicating interest in their property. In addition, it also gives the homeowner time to consider their options without too much pressure. Of course, if you really want to stand out from the crowd, you could send a handwritten note expressing your understanding of the homeowner’s situation and asking for a meeting to discuss how you may be able to help—when they are ready.

There are the risks, however, that either the card or note will arrive before the homeowner is emotionally prepared to think about the problem or it will end up in the trash with all their other unwanted mail. To mitigate these potential setbacks, you can implement a “drip communication” strategy. That is, you send a postcard every 7-10 days for a few months with the hopeful idea of catching the homeowner’s attention through persistence and repetition. Be aware, however, that drip mail campaigns can be costly and have a low response rate.

Pick up the Phone

There are many investors who profess that picking up the phone is better than any other real estate investing marketing idea because it’s more personal than a postcard and less invasive than knocking on a homeowner’s door—especially a homeowner who’s facing foreclosure. The appeal of this strategy is clear: It doesn’t cost anything and you have the potential to get an immediate sense of their reaction to your offer.

But calling a distressed homeowner requires special tact. Remember, if they are not paying their mortgage, it is likely that they are not paying other bills as well, and may be inundated with phone calls from bill collectors. You are just another caller wanting something from them. So, you will need a pitch that expresses understanding and helpfulness to rise above the noise of other callers.

Some find calling on the phone anxiety-provoking. There are numerous scripts online that you can use to guide you through it, but the quality varies dramatically. One thing to never do while on the phone with a homeowner is to let it slip that you have any inside knowledge of their mortgage problem. In the best-case scenario, this will lead to alienating the homeowner. At worst, they will let loose with a mouthful of expletives and hang up.

Knock on Their Door

Some investors believe that knocking door-to-door is the cheapest and easiest way to find a good investment deal. Typical words of wisdom include:

  1. Dress business casual— you don’t want to look overly slick
  2. Go between 5-7 pm when people are off work
  3. If you are male, bring a female with you so as not to be intimidating.

For proponents of this strategy, this is an opportunity to put your best foot forward and make the impression that you are trustworthy and have the homeowner’s best interests in mind.

However, door-knocking is the most invasive form of outreach to a homeowner. Stories abound of homeowners becoming defensive, angry, or even aggressive once they understand that you want to buy their home. If you plan to use the door-knocking strategy, it’s important to be prepared with talking points that express your credibility and ethics. In addition, it doesn’t hurt to have a personal safety plan. After all, you will be knocking on lots of doors—it’s a numbers game.

A Different Strategy for Winning Investment Opportunities

The biggest factor in successfully establishing rapport and communication with a distressed homeowner is repetition and the number of touchpoints. As they say, familiarity builds credibility and trust. Mail campaigns, phone calls, and door-knocking just can’t out-perform a solid, national brand name when it comes to building a trust relationship with distressed homeowners.

That’s why real estate investors who haven’t found success on their own turn to HomeVestors®. The “We Buy Ugly HousesⓇ” campaign is familiar to homeowners nationwide. Guess who distressed homeowners call when they need out of a difficult mortgage problem? The answer is, an independently owned and operated HomeVestors® franchisee. If you are ready to convert more real estate investment leads with the best marketing tools for investors, reach out today for more information.


Each franchise office is independently owned and operated.




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