Strategy #5 - "Foreclosre Consultant"...

Strategy #5 is actually a New Entry into the list of "Fundamentals" of real estate investing strategies and comes about due to a change in the laws of the state of Maryland. While it is currently unique to Maryland real estate investors, it is worth paying attention to because of the groundswell of state legislation regarding real estate and foreclosures/pre-foreclosures.

In 2005, the Maryland legislature passed a law, widely known within the state as SB-761 (State Bill - 761), it raced through the legislature in January and was signed into law by the Governor in April.

Without getting into all the specifics, the simplified (very simplified) version of what has happened in Maryland is that it is essentially illegal for an investor to communicate directly with a home owner who is facing foreclosure when the investor provides "consulting services" and then moves forward to the purchase of the property. Now before you get out your dictionary and start crafting your own definition of "consulting services", note that the law defines what these services are and the list if very broad.

In addition, the law also create a definition of a third-party person who would come in and assist the homeowner in financial distress and labeled this person as a "Maryland Foreclosure Consultant". Again, the law defines what this person is and what this person is allowed, as well as is suppose to do. What is interesting is that the law does not require these Maryland Foreclosure Consultants to be licensed or regulated. It does, however, clearly allow for them to be compensated and does spell out the types of services they are to perform and the technical requirements of what is suppose to be in the documents they use.

A number of very intelligent people have looked at this new law and come away with slightly different interpretations of some of the specifics. HOWEVER, one area that everyone is in agreement on is that in 2005 the Maryland Legislature and Governor essentially created an OPPORTUNITY for real estate investors to specialize in the niche area of Foreclosure Consulting.

When you step away from the law and look at this from a purely business opportunity view, what you see is the opportunity to do something in real estate that is not as burdensome as being a real estate agent, has none of the risk of wholesaling or other facets of the business where you actually take title and put up money, and yet can be very lucrative - if done correctly.

I personally know of one person who is a Part-Time Maryland Foreclosure Consultant who is making well over $125,000/year doing it - part-time!

This strategy is very close to Bird Dogging, but not 100%, has many of the same elements of Pre-Foreclosure & Foreclosure investing, but with many fewer "moving parts", and does not require a license. Therefore, strategy #5 is "Maryland Foreclosure Consulting".

Even if you do not live in Maryland, this strategy is worth looking at. There are a number of states including NY, North Carolina and Georgia who are looking to put similar laws into place in the coming years. DC is also taking a very close look at what is happening in Maryland.