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As I had mentioned in a previous email, Cindy and I have "fixed-and-flipped"
over 350 houses, wholesaled another 60 +, and we are adding to that number
If there is one thing we have learned, it was that our good investor friend
right who told us "Real estate is a moving target"...I would take it a step
farther and say, "Who the motivated sellers are is a moving target!"
When we started flipping real estate in 1995, almost all of our purchases
from bank and government foreclosures. In 1997, you can see (you MUST
check out this chart, click below) that in Southern California foreclosure
sales hit a high of about 70,000 foreclosures...
This continued until 2000 when foreclosures started to drastically drop. By
2002 lender owned inventory dried up. That was a very rough year for us...
...Once we stopped our pity party, we changed our approach. We tried a lot
of things that didn't work, and finally something that did which was going
directly to the homeowners (door knocking and cold calling). Once again,
through trial and error, we started finding fantastic deals, and the ride
UNTIL...in 2006 we found ourselves struggling again (amidst exploding
foreclosures, isn't that ironic?). Even though foreclosures are breaking
the homeowners who actually still have equity in their homes is practically
In 2004, this approach worked because there were SO MANY homeowners
with equity, all the investors and lenders couldn't cover them all and if
were quick, you could get there first.
...now, the transition is unmistakable. This time, the foreclosure sales
have dwarfed the last cycle, and we are very excited to go right back to
started, which is...
...Buying bank owned repos (REOs)! We had already bought more bank houses
in the first half 2008 than we did in all of 2000-2006....and it has only
The nice thing about repos is that you don't have to be an expert in
preforeclosures. There is much less hassle i.e. (using the wrong contract,
title issues, and liability) - no one will accuse you of taking advantage of
innocent Washington Mutual...you can focus on buying, not covering your
The biggest disadvantage is that banks don't give terms (carry paper) like
individual motivated sellers will. If you are not buying with cash, It's
to find a good money partner or hard money lender
(we know good hard money lenders if you need help in that area).
.....stay tuned...we're going to discuss what the "Subprime Meltdown" is in
plain English, why focusing on bank inventory will make you wealthy, and
insider tips (plus we learn as we go, we attend many seminars and talk to
many other investors and especially REO agents), we will pass our knowledge
on to you.
Be Happy and Prosper,