There is no equity in the market.
The market is heating up, there are no more foreclosures.
Here at Foreclosures.com we get these objections every day. If you look closely at these statements they are a direct contradiction of each other. How can the market have no equity, yet be moving like hot cakes?
The story is that the California Real Estate Market is extremely fragmented. In early 1995, down in the southern corner of San Mateo County, a strange trend started: there were less foreclosures there than the same time one year earlier, The trend spread south and north. Now San Mateo, San Francisco, Santa Clara and most of Southern Alameda County are experiencing shrinking foreclosures. The trend has also jumped on the silicon express to Orange County.
These areas are experiencing growth in the volume of sales transactions. Properties are selling for more than the original asking price, Yet distressed property deals for deep discounts are being made daily. We now have areas being glutted with record foreclosures Sacramento, Riverside and San Bernardino counties and areas with fast moving real estate; markets. In both situations professional property buyers are, finding deep discount deals. They are finding them because they have developed a system and are like religious zealots in following it.
As an example, last Saturday I had dinner with a group of people I hardly knew. One of the couples told us of their recent home purchase in Menlo Park, an area at the epicenter of today's resurgence. The couple was quite proud of the discount they had gotten.
They started looking for their home in January, 1996. They had lost many prospective purchases to higher offers. In the nine months before they bought their home in September, they had made 12 offers that were overbid by others. Every weekend was a monotonous routine of viewing open houses and touring listed properties. They were sick of it, but they did not give up.
One Saturday, they stumbled on an unadvertised open house being handled by an agent based over 30 miles away. The homeowner was a man in his seventies who now lived out of state, He had paid $25,000 for the home and owed nothing.
The property was distressed. The owner had become such a stingy user of water that the water company owed him $500. Not a green blade of anything could be found in the garden. The interior was covered in a film of dust. The appliances were avocado. The carpet was harvest.
Our excited buyers did not hesitate, they offered the seller 67% off of what they knew it was worth and he jumped. They were now proud owners. After repairing the property, they paid about 80 cents on the dollar.
This is the kind of opportunity I want. If I had gotten to this seller first, I know the conversation would have been worth my time. I also know that if the buyers had used a catalyst in their system they would have found a viable opportunity sooner. Our buyers should have worked the notices of default, trustee's sales and trustee deed recordings for their area.
If they had applied their consistency and tenacity to a good system of farming public foreclosure recordings, they would give up their jobs and become property buyers. They proved they could stick to a tedious task. They were willing to buy As Is property. They were willing to ask for an aggressive price. They have what it takes.
In our classes we teach the FED (Focus, Effort, Discipline) system. Focus your efforts on properties most likely to bring success. Apply consistent and relentless Effort to buy those properties. Have the Discipline to stick to the system until successful.
Too many of our students ask themselves, Does this work? They should be asking, When will this work? I have yet to find a student who applied our system religiously for six months and was not successful in buying a heavily discounted property.
I can understand quitting. Chasing properties is not glamorous. The sexiness is in the money made when you sell property. It can be difficult to remember this while being rejected, Our example buyers wanted a house in Menlo Park, They never gave up the belief that they would succeed. They did not stop at rejection. They are now doing the cocktail circuit with their story.
Did they act like average home buyers? No. They were extraordinary home buyers. Their effort was way beyond what most of us would do.
There is no such thing as an average property buyer. There are some rich extraordinary property buyers though. Therefore, to make yourself rich by buying property, you must be extraordinary. Not extraordinary like Albert Einstein's intelligence or Michael Jordan's athleticism, extraordinary like our buyer's persistence.
Implement a system for finding property. Perform the system without fail. Don't give up.
This does not mean to do the exact same thing every day. The definition of insanity is doing the same thing over and over and expecting different results. If the system isn't working, change it. But don't stop.
Change a letter you're sending. Be less discriminate on whose door you knock. Follow up a little tighter on your offers. But don't give up a routine.
The easiest way to make sure you do the work necessary is to make it part of your routine. Open your mail and sort properties before you brush you teeth each night. Go talk to people face to face after church each Sunday. Call your offers and follow up during your lunch break each day.
Do this day after day, week after week, month after month and I know you will not go year after year without becoming a successful property buyer.
