Best strategies for helping preforclosures
Hey BP,
This summer a partner and I created an acquisitions platform, Evergreen Investments. Our goal is to help families avoid foreclosure and we primarily door knock, call, and text preforclosure notice of defaults. Our monthly conversion goal is 500 leads > 50 conversations > 4 appointments > 2 offers > 1 acquisition. Last weekend we put a sweet property in Oceanside under contract. Excited to see what the future with this strategy holds!
For those more experienced in foreclosures, the 3 strategies above, and/or acquisitions as a whole, what advice do you have on how to optimize this process? Is there a specific opening line you like to use when a lead is cold? How do those conversion rates look? When the exit is a wholesale, how do you all go about finding your cash buyers?
Any advice is appreciated.
Thank you all!
-
Real Estate Agent
- http://investwithevergreen.com
- [email protected]
@Lindsey Johnson
How are you helping someone in preforeclosure ? By buying the home?
Wouldn’t the person be better off hiring an agent to sell the home and get market pricing?
Short answer is, It depends.
In some cases, listing may be the best way to go! But, with days on market lengthening and talks of a recession, that notice of default may quickly turn into a notice of trustee sale if the timeline is too far progressed. Yes, you can apply for an extension and we do if that will help them, but I think that is just kicking the same can down the same road. Probably won't change a whole lot. Secondly, Often times these properties are also tax delinquent and/or in disrepair. They won't appraise out for a conventional mortgage and thus wont quite fit the needs of an average buyer. You could renovate and list, but if you aren't paying your mortgage for 120+ days (the general timeline for being issued an NOD in CA), you likely don't have excess money laying around to renovate. We can also help with loan modification, renter placement, and bankruptcy attorney referral, but these options are also quite unappealing to a distressed owner. Generally speaking these properties are best served with a cash offer (for me a wholesale) or a creative financing situation. Enter Evergreen Investments:)
Foreclosures are on the rise and will continue to be one of the best investments in my opinion!
-
Real Estate Agent
- http://investwithevergreen.com
- [email protected]
@Chris Seveney And I say all the above humbly, knowing I am still in the early stages! I do think it helps to articulate though, so thank you for the opportunity. Any advice is welcome.
-
Real Estate Agent
- http://investwithevergreen.com
- [email protected]
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- Austin, TX
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Subto is the ideal scenario always,
Quote from @Lindsey Johnson:
Short answer is, It depends.
In some cases, listing may be the best way to go! But, with days on market lengthening and talks of a recession, that notice of default may quickly turn into a notice of trustee sale if the timeline is too far progressed. Yes, you can apply for an extension and we do if that will help them, but I think that is just kicking the same can down the same road. Probably won't change a whole lot. Secondly, Often times these properties are also tax delinquent and/or in disrepair. They won't appraise out for a conventional mortgage and thus wont quite fit the needs of an average buyer. You could renovate and list, but if you aren't paying your mortgage for 120+ days (the general timeline for being issued an NOD in CA), you likely don't have excess money laying around to renovate. We can also help with loan modification, renter placement, and bankruptcy attorney referral, but these options are also quite unappealing to a distressed owner. Generally speaking these properties are best served with a cash offer (for me a wholesale) or a creative financing situation. Enter Evergreen Investments:)
Foreclosures are on the rise and will continue to be one of the best investments in my opinion!
I would be very careful how you market this. In many states it is considered predatory targeting preforeclosures and also marketing as if you are "helping the homeowner", as based on what you are saying it does not really appear you are helping them but performing a service to them for a fee - big difference. Throw this in front of a politician and on the front page of a paper and get in the crosshairs of a state authority and good luck. States are much more consumer friendly today and third parties who are not licensed acting as "helping" can be a recipe for disaster. Not saying what to do or not do or evaluating your model, just bringing up things to be careful of. There were companies like Vision Properties, Harbour Portfolio who were giving people ability to own homes and ended up in multi-million dollar lawsuits. Just google preforeclosure indictment and this is a frequent topic.
Thank you for the feedback. If you carefully look at the 8 solutions I mention, 6 of them are ways for the family to keep the home. All ways I do not get paid and do truly help the family. Hardly predatory. The final 2 are services for a fee, but not a fee to the seller. All 8 remedy the foreclosure and help the family. I am also licensed so thats a plus too if they do want to list. I hear and appreciate your concern. I know there certainly are ways to make this process predatory. But our goal is to help families, not manipulate them.
-
Real Estate Agent
- http://investwithevergreen.com
- [email protected]
Quote from @Eliott Elias:
Subto is the ideal scenario always,
Agree! Deff plan to use this strategy when the deal is right.
-
Real Estate Agent
- http://investwithevergreen.com
- [email protected]