RE Agent/Emerging investor Montgomery, AL

Hi everyone, I am a Realtor and a Mortgage Consultant in Montgomery, Alabama. Over the past 3 years in the business I have learned alot about how the business works and what motivates people to make their decisions. With the down turn in the market Ihave recently seen a lot of people giving away the equity they have built up over the years, like they don't expect the market to return in the near future and many have demolished their credit prior to selling, thus leaving them with very few options other than renting with the mortgage guidelines becoming more strict. I am interested to know what techniques are used to locate homeowners and investors who are willing to do owner financing or hard money lending. I would greatly appreciate any responses.

Edited: 06/26/2010 at 05:44AM

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

Moderator Pro

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Aug 22 '08, 12:50 AM

Hi Clint and welcome to Bigger Pockets.

The wholesaling forum may have some ideas for locating distressed sellers, some of whom may be able to do owner financing. I suspect you're mostly talking subject to or lease options.

Best way to find HMLs is to go to a nearby REIA and start asking around. Can also look in the paper for ads that say "money to lend for real estate". Or starting calling mortgage brokers.

I'm curious about this statement:

Ihave recently seen a lot of people giving away the equity they have built up over the years

I think many people don't have any equity, for a variety of reasons. If they bought at the inflated bubble prices with minimal down payment, then the declines wiped out what little equity they started with. If they bought long ago, and saw the values rise with the bubble, and borrowed that money, then they've already taken the equity. If the didn't borrow it, and have now seen it disappear, then they had a paper gain and loss, just like the guy who watches his stocks go up and come back down. Finally, I think a lot of folks overstate the equity they think they have, due to the very high transaction costs associated with real estate. If you say you have $10K equity in a $100K house, you're really fooling yourself. If you had to sell, you'd likely walk away with, at best, a few thousand after all the costs. These days, you'd be doing good to avoid having to pay to sell a house with a 90% loan balance vs. sales price, thanks to seller concessions.

Edited: 06/26/2010 at 05:44AM

Jon Holdman, Flying Phoenix LLC

Glen Andrews

Real Estate Coach · Oviedo, Florida

36 posts
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Aug 22 '08, 01:39 AM

Clint,
There's a couple of ways to locate possible seller financing.

1. Sellers who own their home FREE and clear.

2. Landlords who have several properties. In most cases it's only a matter of time before landlords get tired of dealing with tenants. I have had GREAT results using this technique.
The landlord wants cashflow just not the tenants. So they are very flexible sellers.

3. You can also take over existing loans "Subject To" but you would need to be educated on this particular strategy.

To locate these individuals go to Melissadata.com and ask for Free and clear properties in your area by zip code or county.

To locate Landlords go to melissadata.com and ask for absentee owners in a specific zip code or county.

Once you have the list send them a personal handwritten letter or postcard See my article on Marketing for success.

Hope this helps!

Edited: 06/26/2010 at 05:44AM

Cornell James

Real Estate Investor · Birmingham, Alabama

40 posts
50 influence

Aug 23 '08, 09:47 PM

I started a Alabama group on Bigger Pockets for local investors to network. Join group and share ideas. The absentee owners list has worked pretty good for me along with Bigger Pockets. We are in a good cash flow market in our area. Birmingham,Montgomery and Tuscaloosa are doing well. I would suggest going to your local REIA group an networking. I have a few HML's in our areas and a source that works with a lender. I'll get it together and send it to you

Edited: 06/26/2010 at 05:45AM

Joshua Dorkin

BiggerPockets Founder · Denver, Colorado

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Aug 24 '08, 08:20 PM

Welcome to the site, Clint! Sounds to me like the guys have already provided you with some good info, so I'll just say hey! See you around.

Edited: 06/26/2010 at 05:45AM

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Clint Rasberry

Residential Real Estate Agent · Montgomery, AL

11 posts
50 influence

Aug 24 '08, 10:28 PM

Hey guys, Thanks for all of your suggestions they will be very helpful, not only to me but some of my clients as well. I will be going to the next REIA meeting here in Montgomery and possibly Auburn and Birmingham as well if they aren't on the same schedule. Hopefully I will be able to get some useful information to share with everyone to make their pockets bigger.

Edited: 06/26/2010 at 05:45AM

Jason Hanson

Real Estate Coach · Oakton, Virginia

696 posts
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Aug 25 '08, 12:49 AM

Clint,

I would also check out the marketing forum on this site. You will learn how to locate motivated sellers and make a lot of money in this market.

Edited: 06/26/2010 at 05:45AM