On today’s episode of the BiggerPockets Podcast, we are joined by Arizona real estate investor Tracy Royce to discuss all things related to short sales, getting started, and the best ways to run your real estate investing business.
This show has a ton of tips for finding the best way to help sellers who are underwater on their mortgages and still make you a profit as a real estate investor, as well as great strategies for using virtual assistants to lighten your work load and other tips for those who are just getting started.
Read the transcript for episode 19 with Tracy Royce here
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In This Show, We Cover:
- How to get paid to learn about real estate
- How to parlay your talents into a job with a real estate investor;
- How to “shift” with a changing market and recognize future trends
- How to use virtual assistants in your real estate business
- Goals: Good, bad, and ugly
- Getting started with no money by using technology and social media
- What a short sale is and the short sale process
- How to find a great short sale agent
- Tips for getting your short sale offers accepted
Books Mentioned in the Show
The Four Hour Workweek by Tim Ferriss
Shift by Gary Keller
Atlas Shrugged by Ayn Rand
Think and Grow Rich by Napoleon Hill
E-Myth Revisited by Michael Gerber
Winning by Jack Welch
Links from the Blog
Tweetable Topics
“When investing in real estate – you have to start out in the mail room.” (Tweet This!)
“Don’t expect to get rich tomorrow. You gotta put the work in, you gotta hustle.” (Tweet This!)
“If you want an easy job, Sell kittens at a pet shop. Real estate investing isn’t easy.”(Tweet This!)
“If you put more fishing lurers out there, you are more likely to catch things.”(Tweet This!)
Connect with Tracy
Tracy’s Website www.RoyceofRealEstate.com
Tracy’s BiggerPockets Profile
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28 Comments
Great podcast as usual guys!
Tracy, I’m a real estate agent and have sold a few short sales, normally I hire a mitigation company to handle the deal for me.
I have a question for you. If you find a motivated seller that is underwater, do you make a deal with them, and then have an agent list the home and put in your offer right away?
I ask because on this particular deal, the PP was $237K, bank BPO and counter is $270K, actual value is probably somewhere in the $240k-$250k, so in order to try and get the bank to accept a counter of $243k, I did a cma for them, as well as sent in all of the listing and showing histories on the property, which was on the market for about 5 months at a $259k asking price.
My point is, do the banks scoff at an offer if its DOM is only a couple of days? Or do you find they only really care what the offer vs. their (always inflated) BPO is?
Thanks!
Hi Ryan,
In most cases I’ll list the property myself, and have a professional negotiator work with the lender(s). I still oversee the process but that is something that I prefer to have as a part of my team, since negotiating can take a lot of time and redundancy; not the best use of my time.
Regarding DOM, I know FHA ss’s (and some lending institutions)will have a pre-foreclosure process in which they come up with a price, even if you have (or have not) sent them an offer, and tell you, “Ok, list the property for this long as see what you can get”. We simply turn around and say, “Actually, we’ve already sent you an offer. Why penalize us for having a network of buyers/buyers agents?” So, in my experience, it doesn’t really matter.
Like you said, they care more about the value vs time on market. And in fact, longer it goes, more money they stand to lose through attorney fees, foreclosure fees, missed payments, etc.
Do what you’re doing and fight the good fight…just be real with the Sellers and let them know the Banking Industry isn’t known for altruism, or sanity for that matter.
Thanks for the comments and glad you enjoyed the show.
brandon, avoid reading Atlas Shrugged unless you have nothing else better to do with your time. very long, and repetitive. the message in the book is fine an all but with each page turn, you want to rip you hair from your head for ayn rand dragging out every scene. do yourself a favor of getting the cliffnotes instead.
lol, another great podcast also….
Thanks John!
Thanks for listening John! I can certainly see the redundancy, but I think she does a pretty good job of keeping the reader engaged with the characters and twists. But, I don’t read much fiction so perhaps it makes it a little more intriguing for me. Appreciate the comment though!
Thanks John! Maybe I’ll look up the Cliffnotes then! 🙂 I feel like the movie could have been good, but it felt too low-budget for me and that it didn’t move fast enough. I guess the book is kinda the same way!
Glad you liked the show!
I ask because on this particular deal, the PP was $237K, bank BPO and counter is $270K, actual value is probably somewhere in the $240k-$250k, so in order to try and get the bank to accept a counter of $243k, I did a cma for them, as well as sent in all of the listing and showing histories on the property, which was on the market for about 5 months at a $259k asking price.
I am trying to wrap my head around your asking price of $243k
If that is the retail price why not just buy another property retail.
Why go through the trouble.
Maybe I don’t have all the info.
Please explain.
Thanks
Hi Peter,
I am an agent as well, and this particular deal is one of my listings. It is a divorce situation, and the buyers are buying it to live in themselves. Therefore, they are paying pretty close to full market value.
The question I have, is if I find a motivated seller who is underwater on their loan, AND their house is not listed, how do the banks react to a short sale that had no days on market.
Ryan
They may or may not ask for the listing history. PM me for more info…
Tracy – I enjoyed hearing your thoughts. You couldn’t pay me enough to do a short – either as an agent or an investor. Not for me, but Good for you. It was good to hear you thoughts. Thank you
Ben
Ben thanks so much for taking the time to listen to this. If you’re not doing short sales I’m sure the end wasn’t as engaging for you, so thanks for listening and commenting!
Great comments and ideas.
Sounds like on this market your primary biz is S.S. and I’m trying to find them before NOD is filed?
Question: what’s the best source to find pre-foreclosure leads?
Thank you,
Hi Noe, my primary business is not necessarily short sales, they just happen to fall into my target market of distressed/pre-foreclosures.
Ask your local title company for 30-60-90 day lates. This is a list of people who are 30-60-90 day late on their mortgage, and may not have a NOD posted yet.
Hope this helps and thanks for listening!
Please don’t judge Atlas Shrugged by the movie. The movie is bad. The book is…..wow.
Jon originally the movie was going to be made while Rand was still alive, but she wouldn’t release the script rights so it never got off the block. Had an all star line up and famous director, too, but, looks like some others are taking a crack at it. Thanks for the comment!
Ms. Royce,
I’ll try not to gush here…. let me simply say it was nice to put a voice with a face and writings. Yes, I’m a fan of your BP blog.
Thanks for sharing a bucket load of info.
I really enjoyed this pod cast because I will target pre foreclosure for my direct mail. I have been trying to learn as much as I can regarding what short sells are all about.
Great job!
Thanks for listening, Bill!
My name is Aaron, and I am just getting started setting up my real estate investing business. I am looking to complete a wholesale deal (contract assignment), so most of my leads come from direct mail marketing. However, I came across a home in my neighborhood that is boarded up and vacant, so I did a bit of digging and got the owner’s phone number.
Long story short, she lives out of town, and she owes about 80k on the home. Most of the assessments that I have seen value the home at less than that. I am cautiously pursuing this lead by keeping in contact with the owner and contacting local professionals such as lawyers, title companies, and real estate agents. They all basically tell me that this could be a lucrative opportunity for a short sale, but there are is a lot of detailed work involved, as well as precautions to take.
I am a novice at real estate investing, but I seem to be the only person actively pursuing the purchase of this distressed property facing imminent foreclosure. Is it realistic for me to monetize this lead, or should I steer clear?
Great podcast. This article inspired me to write down what we’re doing so we can start working on our business instead of in our business.
I had the same concern too about paying people a few bucks an hour but knowing that this is way more than what the would normally make helps. Thanks!
Tracy-
Great information! I love your advice about getting paid to get an education. Apprenticeship is usually much more effective than college education.
Travis
This was a great podcast! I have now signed up with Odesk.com. Thanks Tracy!
I appreciate the knowledge that you have provided to me today.
In listening to your show, I do realize that we all just have to START somewhere. Where I have no issues whatsoever and I will lend a hand to anyone that asks whether paid or not. Don’t get me wrong, getting paid is better!
My question even though you do not like to impart the information. I presume it is a “give a fish…eat for the day, teach to fish….eat forever. I am so willing to learn! As you sort of mentioned, you will not know everything….there is always more to learn, try and do. I need to know where to go or what to read or how to better understand the real estate cycle? How do I better understand where we are in a real estate market whether my market or any market? How do I read the signs?
I would appreciate your answer and/or mentor-ship. Please point me in the right direction.
Warren
Greenville, SC
Virtual Assistants, GREAT ideal.
Tracy, or anyone that can answer, you mentioned you need a licensed agent to do a short sale which is the first time I’ve heard/read that. Can anyone confirm this? I have book that outlines steps to do them on your own. Thanks
Lots of great knowledge in this podcast. I like how you run your business and are very entrepreneurial. Great information, thanks!