Niches That Bring you Riches Pre-Notice of Default (Pre-NOD)

This article is part 3 of a series where I am teaching you Real Estate Investing 101 – Choosing and understanding the best Real Estate Investing Niche. What makes it the best? Well, that will depend on a few things. You will want to look at the current market conditions in the area you would like to invest and match that to your resources, experience & personal lifestyle preference.

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Today I will jump into specifics about the first of several types of real estate investing niches you may want to consider – Pre – Notice of Default. (Pre-NOD)

What’s the easiest simplest way to find real estate deals? Be the first to talk to the person who needs the help you provide! You can get a jumpstart on your competition by getting connected to the people who need you the most. Those that are heading toward foreclosure by showing 30/60/90 day late on mortgages but not yet in default are referred to as Pre-Notice of Default.

  • Why is this a good niche to consider?
    • Did you know there were over 1 million foreclosures in 2011. Imagine how many deals you could have done if only you knew about these people needing your help before it was too late.
    • So doesn’t it make sense to get a huge advantage over your competition by getting the leads of people who need your services before anyone else does? Of course it does.
  • Best kept secrets about Pre-NOD leads:
    • More than 3% of these homeowners are not living in their house. That’s right – – -VACANT HOUSES
    • You get 60 to 150 days more time to work with a homeowner than when you use a run of the mill NOD list.
    • You have more time to research every facet of these deals.
    • You have more time to pre-sell the property before you close on it.
    • You get the deal before mortgage arrearages get out of hand, opening up more opportunities to take property over “subject to” the existing loan as you work on selling it.
  • What are the downsides of this niche?
    • Sellers may not be as motivated because they are not as close to foreclosure. I have found that even those who have received a written notice of default often deny the seriousness of their situation. They have time to work something out with the bank. So if they would rather stay in their home, talking to them early may not help. They will be looking for ways to get caught up before selling. However, if your market is declining, many homeowners would rather walk away from their mortgage than keep a house that is worth 20,30,40 or even 50% less than they owe. (More on how to deal with this situation later.)
    • You have to pay higher price for leads.
    • Leads for this niche are usually found on credit reports and the credit information is often not posted by creditors until 30 days after the payment is missed. Therefore, the credit report is usually 30 days farther behind than actually noted on credit report or can even be paid up by the time you see it.
    • You still have to find houses with enough equity in them for you to buy at a discount. And in many U.S. markets today, this is like finding a needle in a haystack.
  • What are good market conditions to consider this niche?
    • You want to look for the following market conditions in the area (s) you plan to research and invest.
      • There is a high number of homes in pre-foreclosure
      • Interest rates on loans are high
      • Lenders tightening their belts and not flexible
  • What are bad market conditions where you might want to avoid this niche?
  • Avoid focusing on this niche if these conditions exist.
    • There is a low number of homes in foreclosures
    • Low mortgage interest rates – allow for lowering payments on refinance
    • Lenders are flexible to work with those who have been late on their payments
  1. Establish Personal Goals
  2. Research Your Market
  3. Research and invest in necessary Tools and Training
  4. Invest in a personal coach/mentor
  5. Establish Your Real Estate Investing Goals
  6. Put together qualified Power team
  7. Market to develop buyers list
  8. Get financing options in place
  9. Purchase a Pre-NOD leads list from reputable list company
  10. Market Yourself (I Buy Houses)
  11. Interact with Sellers
  12. Evaluate Property and Profitability
  13. Develop Exit Strategy
  14. Get into Contract
  15. Rent or Sell it!

Pre-NOD lists may be found and purchased at the following online resources, (The purpose of these references are only to give you some resources to do your own due diligence. I do not endorse these companies and am not getting paid for these referrals. Do your own due diligence…as always).

Wallstreet Lists Mortgage Leads lists
Tranzact Information Services Mortgage Leads lists
Experian Mortgage Leads lists
Yellow Letters Complete NOD Leads and yellow letters
  • When buying a list, consider these parameters to be included in your report:
    • Homeowner type
    • Income Level
    • Age
    • Race
    • Length of time in property
    • # of months behind on payments
    • Loan type
    • Interest Rate
    • Fico score modeled / actual
    • Mortgage amount
    • Home value
    • Mortgage date
    • Lender name
    • Lender type
    • Loan to value %
    • Revolving debt load
    • Trade lines borrowed
    • Phone Numbers
    • Geographic locations
    • State, county, zip code, area code, city
    • Customized data delivery to you
  • Here are some lists types you might consider asking for when buying leads for Pre-Notice of Default niche:


Mortgage trigger leads are hard inquiries into a person’s credit report generated daily. These consumers have just had their credit checked within the past 7 days, specifically for a mortgage loan approval.

Mortgage trigger data is one of the most sought after data products in the mortgage origination industry. They allow you to target prospects that have already shown an interest in completing a mortgage transaction.

The problem is that the pricing structure in most cases is such that only the larger companies can afford to take advantage of this product. Vendors have typically required buyers to make large monthly commitments, often tens of thousands of dollars, in order to be able to purchase this data.


This database contains homeowners that have deeded with a typical sub -prime lender and have an adjustable rate mortgage, likely to expire and adjust, either from a 228 or 327 loan program. This database is the most targeted approach towards marketing to non-prime homeowners with an ARM about to roll out of their prepayment penalty time period or impending interest rate increases. These homeowners have a variable rate mortgage and are affected by interest rate fluctuations. Set the time when the homeowner took their arm loan out to go after those 1,3 and 5-year loan programs.


This database contains homeowners with good credit scores, above 640. These homeowners are quick and easy to the closing table.

CREDIT SCORED DATA – Compliance paperwork must be filled out prior to order

This data and time stamped data is coming directly from the credit bureau. This data is an actual snap shot of the homeowners’ credit report. This data is the highest quality as a result. Set your exact fico ranges you wish to work with.


Make a pre-approved offer to either prime or sub-prime refinance candidates who have at least one recorded late payment on their mortgage in the past twelve months. Quite often, a late mortgage payment is a sign of impending financial difficulty, therefore these homeowners are very likely to respond to a debt consolidation or cash-out offer.


These homeowners have all deeded with a typical sub-prime lender, with modeled fico scores between 520-640. Require % of equity to work with on your list.


These homeowners have underpaid escrow and have not paid their property taxes. These homeowners need assistance to get these paid off right away

Watch for my next article sharing information on Niche #2 – Pre-foreclosures.

To learn more about 12 of the most popular real estate investing niches, please enjoy the articles I have written detailing how to use them and grow your real estate investing business. Enjoy!


4 thoughts on “Niches That Bring you Riches Pre-Notice of Default (Pre-NOD)

  1. Very nice post, I am also associated with real estate, foreclosure Los Angeles County, California taxes and properties. I enjoy reading new stuff on this subject, and I hope you will be adding new and fantastic posts on property services. Thanks for writing such a wonderful post.

  2. I’m a big fan of notice of default lists. They’re often heavily marketed to, like you point out, but they’re the most highly motivated leads I’ve found and I’ve tried everything- tax lien, bankruptcy, divorce, absentee, high equity, vacant property, etc.

  3. This is awesome info. Just what I was looking for. I am trying to get in front of the tax sale auctions in Memphis. This is a point in the right direction. Thanks!

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