Do More Deals - Tapping New Resources
Sometimes, it was the last trip to the post office because your stamps didn't arrive on time. Standing in a line to buy large quantities of stamps can make you question why you're doing this. Especially when you check your monthly marketing sheet and your 5,000 letters returned you a whopping 5 calls. Is it time to change up your marketing plan? Will a red letter work better than a friendly yellow letter, or has the message gotten lost in the piles of unread mail on that kitchen table?
Sometimes, the moment comes when you find a bunch of other investors on the steps for the auction that used to be only 5 guys standing around.
Sometimes, what used to work well only works when the newbies run out of cash. What happens when the best kept secrets are getting bid up, like the ones on the popular auction sites? Hubzu works well, unless the newbie decides he really wants the deal. Overzealous bid clicks might run you out of the bidding process.
When you're pulling the plug on your marketing and ready to call it a day, it's time to change things up. It's time to let the leg work be done for you and find a new approach. Find an untapped resource!
How about one that has:
Clear title
All utilities in working order (usually)
Fair condition of overall property (sometimes its great, sometimes it's bad)
Cash works, but so can financing
Rarely more than one bidder at a time
Available in all markets, all year round
No surprises during the closing process
No driving for dollars, no letters, no marketing needed, not even a sign
Minimal commitment of earnest money funds upfront to hold the deal
Works well for investors with long term plans and buy and holds
So what is this secret resource?
Short sales.
The experienced short sale listing agent does the marketing for you:
They market to find the sellers, so you don't have to.
They know how to pre-qualify the deal.
They know how to sort through the liens, title, mortgages, etc.
Even better, they know the market value and can price it at what the bank will expect on their BPO for a distressed sale. This offers a buyer a built in price point to work with plus, with units being owner occupied, there are far fewer surprises than auctions or REO's.
Of course, the winners are the ones who can wait for the deal. Short sales take 4 or 5 months to close in our area, but patience is rewarded. In the long run, consider that bigger discounts may lure investors in, but getting outbid makes investors cranky. It is a case of where your marketing dollars are being spent, using other people's marketing dollars to your greatest benefit, in order to grow your portfolio.
That's why I like to offer the BP investors a new resource. A listing agent who specializes in negotiating with the bank in-house can be a gold mine for deals. Usually this negotiation is hired out to an attorney or 3rd party short sale specialist. Getting a deal put together like this is a unique occupation, but if you happen to find a team that does this, like ours, it's a secret resource that very few investors tap into.
Nearly $10M in sales this year can't be wrong. Find out more on how a slow short sale might fatten up your investing portfolio for the long term outlook.
Have you done a short sale deal? Was it negotiated by the listing agent? Tell me about your wins and losses in the comments! Thanks for sharing this post!
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