Foreclosures are being bought up by big companies for hold and sale profits - and in bigger numbers than you might think!
The idea is to snatch them up while properties are relatively cheap, rent them until the market is favorable for selling and then to sell them for big profits.
Some people do this well! For example, last year a couple of investment groups partnered and purchased an estimated 5,300 homes in Florida that were in some stage of foreclosure. Yep, that's right...5,300 of them! That's a lot of houses.
While I personally have mixed feelings about buying distressed properties due to the misfortune of the owners who owned them, at the end of the day I understand that foreclosures are commodities... and that buying and selling them is, in its simplest context, a business opportunity like like others. Consequently, I pass no judgement on those who buy them and in fact acknowledge that I've bought some myself.
Still, if you're going to invest in them you need to be prepared to minimize risk while maximizing potential profits.
Do you know how many foreclosure properties are available where you live? Whatever your guess is it's apt to be wrong... and by a lot!
Foreclosurelistings.com provides a database listing foreclosures in cities, counties and states across the United States. It includes sheriff sales, short sales and pre- foreclosures along with contact information, prices and detailed information about the properties.
Check it out now. Type in the city/state/county that interests you the most. I'll wait for you to come back. You'll be surprised at what you discover.
As you saw, you can get a lot of valuable information from foreclosurelistings.com and there are many ways to monetize it. Here are three that readily come to mind.
One. Start a list of high earning, potential investors in your city/county - judges, lawyers, doctors, dentists, investors, etc. You may know some already, but you can also begin to source them through related associations, tv ads, chamber of commerce memberships, etc.
Two. Identify the best opportunities in your city/county and market them to high earners in your city and contact your prospects - see #1 above. At a minimum you want to ascertain how much potential profit is in a property and as quickly as you can.
While there is some serious due diligence required to do this well you want to act quickly before someone else snatches up the most profitable opportunities. For example, if you see a $250,000 listing in a $500,000 neighborhood you should go full speed ahead with eyes wide open! Think you could find some buyers interested in a property like that?
Three. Create a newsletter curating the properties with the greates profit potential, with appropriate caveats of course. Update it regularly and mail o your prospect list. Emailing is the preferred method, as it’s a fast, effective and inexpensive way to communicate the information. Interested investors will absolutely love receiving this information.
Okay, so you have a list of potential investors and you’ve gotten your newsletter going. Now lets look five specific ways to monetize the information.
One. If you’re an agent you can sell the properties for commissions attached to them.
Two. if sales commissions aren’t offered you can enter into Buyer Broker Agreements with your investors where they pay you your usual and customary fee.
Three. You can also agree upon a birddog fee, which is much less than a regular sales commission, but it can still be a significant amount when you factor in the fact that you’re getting paid for information, not full Realtor services.
Four. Another option is to charge a subscription fee for your curated list of best investment opportunities. The better it’s done the more money you can charge. You can even expand the list to include potential investors from other cities/states, as people routinely investment in communities they don’t live in (for other family members, kids going to college in other cities/states, vacation homes, etc.).
Five. You can position yourself to buy the properties and flip them to somebody on your list. One particular strategy to use would be back to back closings, where you buy the property and sell “as is” for much less than what it would be worth after fixing it up.
Take the $250,000 example above with $250,000 equity sitting it. Can you be alright with a back to back closing/flip where you profit $25,000 for just passing the property along to one of the investors on your list? I could!
Below are some more articles with Tips, Tools & Strategies on how to capitalize on your earning potential.
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Well, that's it for now. Hope you enjoyed the page and can profit from some of the ideas offered. Here's to your Real Estate Marketing Success!
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