Foreclosure Forecast Newsletter

You know who said that??  Chicken Little. Anyone out there guilty of listening to their internal Chicken Little?  How about all the Chicken Littles’ who say the real estate market is collapsing and everyone should be running scared?

The media is just having a field day with this stuff. Everybody has to put their “fear based, sensationalized” spin on it.  Even my mom (I’m not bashing, I love my mom) said to me the other day “I hope you are doing okay with the giant real estate mess”.  I said “yeah mom, if it wasn’t for that huge trust fund you established for me and the money tree I have growing in my back yard I’d be sinking right now!!!”  Obviously I’m joking; I have no trust fund or money tree.  What I do have, however, is much better.  I have learned how to invest in pre-foreclosures for profit in any market. This knowledge has given me a solid foundation and a skill set where I can be profitable in anywhere, anytime, in any real estate market – hot, flat, transitioning, or cold. 

What I’ve learned since I started my pre-foreclosure investing business in December 2002, when I graduated from Alexis’ 3-Day Mastering Foreclosures Lab – is that a solid foundation makes all other aspects of real estate easier. This is the platform from which all my real estate investing has grown from.  When you master pre-foreclosure investing, you can go anywhere you want in real estate.  

And guess what guys?? It works in all markets.  When I started almost five years ago, it was really hard to get sellers to sell to me, but real easy to sell them once I got them. Now I have more motivated sellers than I know what to do with, but have more challenges when selling.

Quite frankly, even with those challenges, I love this market! This is the most excited about real estate I have been since I first started!

So let’s talk about why now is an excellent time to be a foreclosure investor.  First off, you make your money when you buy and now it’s easier to buy!  Many of the options the owners used to have to cure their default either don’t exist any more or are much harder to do.

1. The bankruptcy laws have changed making it much harder and more expensive to file.
2. The sub prime mortgage market has pretty much closed its doors, making it impossible for owners to borrow their way out of default. 
3. The retail market has cooled down making it harder for owners to sell in time stop the default. 
4. Couple all this with the rise in notices of defaults filed and now the owners in default really do need us!!

Second reason I love this market………. it can be easy to sell if you understand the market you are in and how to counteract it!!  HUH???? That’s right. 

That’s what I love about real estate – the market will correct you.  If your house is priced too high the market will signal that to you with no offers.  Conversely if your house is priced too low the market will correct you with multiple offers.

I am not one who likes my houses to sit.  Because the market is fickle, which will make your hold times longer, my first preference is to assign my deals out for a finder’s fee to other investors.  There are plenty of investors out there with money who will gladly take over a 30% or more discounted deal from you and pay an assignment fee.  At that point you are out, you have cash in your pocket and your owner has cash and a fresh start.  Truly a win for everyone!

If I am going to take title to the house, fix, it up and resell it I look to “complete the equation”.  Let me define that.  In a cooling market it is not enough to just stick your “for sale” sign in the front lawn or list your property on the MLS.   First you need your house to be competitively priced.  You must learn how to value your house for quick resale (below your competition) when you list them.  Then you need to be proactive in finding a buyer!  That is what completes the equation.  This is how you make sure your house sells quickly and you’re not sitting on the market. 

How do you find buyers and make your house more appealing to them??  You can put ads on Craigslist, ebay, loopnet and more. Offer to carry back a note in favor of your buyer at the close of escrow.  Take advantage of the new auction craze and auction your house with a reserve price set.  Send out postcards about your property to renters in the area of where your house is trying to convert renters to buyers.   Network with loan officers/brokers who are recruiting first time homebuyers and getting them qualified for loans.  Help them complete their equation too – they have a prequalified buyer with no house and you have a house with no buyer!

And of course don’t forget price!  Every house has the right price.  Often times my coaching students say “this house needs so much work who will want it?”  And I say “well if that house were priced at 30 cents on the dollar would that get your attention??”  I’m of course using and extreme number to prove a point; every house has the right price.  Make sure you know how to find it!!!

Ok so lets recap. Now is a:

1. great time to buy (we have more motivated sellers than ever).
2. great time to sell (if you utilize the right strategies).
3. the glass is definitely half full!

I’m not saying there aren’t risks, but armed with the proper knowledge, teaching (from Alexis’ 3 day Lab, and Coach you will be equipped to manage those risks. 

Happy Investing!!  See you at the top! : )
Sarah
Foreclosures.com Graduate, Investor, Lab Instructor, and Coach