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Right now 85% of all foreclosed homes are being taken back by the banks and lenders.
One of the reason the real estate market is so bad is it can take up to 1 year to close a short sale deal.
You may recall from my last video, there are 5 step s you must complete to close just one short sale deal.
Your probably a lot like me your wondering what to do now in this real estate market. I was too. I tried to make money with shortsales and foreclosures. But I found out that we needed to complete this five steps to get just one short sale done. After this I discovered bulk reo properties.
Each of these steps is hard because there are about a gazillion steps to each of these 5 steps.
Remember, you must complete each step or you don’t make any money.
Step 1
You must find people who have the type of property you want to invest in, who are in foreclosure.
This means you need to learn marketing from door to door, cold calling homeowners in distress, direct mail, pay per click, flyers, networking and the list goes on.
You must get good at marketing and this takes time, money, and expertise. Picture Sherlock Holmes with his magnifying glass tiring to fine the right criminal. Searching like a needle in a haystack for the right person with the right property.
This is the first step in investing in short sales. If you fail here everything else is secondary. Meaning no money for you.
Step 2
They must respond to you and not a competitor.
You must be the one! The one they trust out and above all the other short sale investors who went to a seminar and bought a foreclosure course. You must cut through the clutter and get the right message to make this work. If they don’t respond you’ve got nothing. Get tripped up here and no money in your checking account.
Step 3
They must be down with working with you.
The ball is in their court. They must work with you for the long run and not bail on you. One of 100 things can go wrong here. They may finely get a job, they may re negotiate the loan, a competitor may come along that they like better than you. Nothing is guaranteed even if the home owner has agreed to work with you.
All you have is the limited ability to work on as many deals as humanly possible to increase your odds of finding “The One”
If “The One” flakes here all your time, money, and effort is wasted. Strike three, you must start over from step one.
Step 4
The bank, lender, creditors, and other lien holders must work with you.
You must get this cooperation for the duration of the short sale process.
They are getting shafted! These people are less than thrilled. They will be losing money on their own bad deals with the home owner.
Once you get the 2nd lien holders to settle you must pay a lawyer to make sure all the satisfaction of liens are recorded properly at the court house. “Imagine putting in all this work just to have one pain in the rear creditor who wants a full payoff on their bad loan.”
So many deals get killed at this step. Much pain and no gain if you get knocked down on step 4.
Step 5
Congratulations if you are persistent and good enough to reach the step. But you’re not out of the woods yet because the distressed homeowners are emotional frozen.
Like a deer in the headlights and a cornered animal they are Unpredictable.
Plus, they may file bankruptcy which can add 6 months to 1 year to the foreclosure process. Or the distraught homeowner do a deed in lieu of foreclosure and just turn the keys in and split.
Regardless, you must successfully complete each if these 5 major steps to close one short sale deal.
That’s just one deal. Even if you get real good at short sales think of all the road blocks, obstacles, pitfalls and problems you have to overcome for one darn deal?
This is the end of The 2nd Video in this series on bulk reo properties.
Look for my next video on How I finally gave up on the short sale business and started a multi-million dollar Bulk REO Real Estate Business. Buying Bulk REO Properties
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Please leave a comment.
Interesting article and one which should be more widely known about in my view. Your level of detail is good and the clarity of writing is excellent. I have bookmarked it for you so that others will be able to see what you have to say.
Good Stuff. One important problem however. It does not say that it will provide nor show where the buyers are so you don’t take on the banks problem.
Hi Steve,
There is two assumptions. 1. You are buying a home for yourself. In that case I’m sure you will pick a good one. 2. You are buying for an investment that matches your buying criteria. That could be to flip, fix up and rent.
The key is to set your buying criteria and “Cherry Pick” the best deals for yourself.
Mark