Weekly Real Estate Kick-Off

Have you heard about SellPoint yet? SellPoint is an awesome, powerful MARKETING MACHINE. It allows you to completely manage and market your properties using the latest and most advanced mobile and Internet technology. Check it out here!

Hey everyone, I’m down in Florida right now masterminding with some key members of my team, and it’s been super-productive. I’ll be excited to begin implementing some new ideas and unveil the results of these sessions to you soon. In the mean time, take a look at the articles that caught my eye over the past few days. Here’s to a good investing week!

June 28, 2010 - This Week’s Topics:

  • Homeowners Continue to Abandon HAMP
  • BOA Adds Staff to Help Troubled Homeowners
  • Walkability Matters.
  • 5 Things to Know About Short Sales
  • Empowered Buyers Handcuff Sellers
  • Do You Have What It Takes To Design Your Own Business & Lifestyle?
  • Attracting True Contacts

Homeowners Continue to Abandon HAMP

To date, nearly 1/3 of the 1.24 million applicants to the government’s Home Affordable Modification Program have dropped out or been disqualified. It seems that the program designed to bring relief to millions of troubled homeowners is not have having the intended effect. As a result, you can expect to see the number of homes in foreclosure rise. This new statistic means that more have left the program (436,000) than have been helped (340,000) with permanent loan modifications. Continued high unemployment numbers means many will not qualify for the program under the newly tightened standards (proof of income, last two pay stubs, most recent tax returns). On top of that, an expected 75% of those who have received a permanent modification will default again within one year.

BOA Adds Staff to Help Troubled Homeowners

Bank of America has added 2,000 employees within the last two months – all in an effort to better handle borrowers who are having trouble paying their mortgages. That brings the total to 18,000 dedicated to “default management” for the second largest US home-lender. It represents a 60% increase since January 2009. Together, the default management team tackles 100,000 phone calls each day. The president of BOA’s home –loan and insurance unit, Barbara Desoer, said, “Given the depth of the nation’s recessionary impacts on homeowners, a considerable number of customers will transition from homeownership over the next two years. We must compassionately and responsibly help those customers who have exhausted all their options and can no longer afford to stay in their homes.” BOA handles one in every five home mortgages. They are stalling on foreclosures until homeowners have exhausted all other efforts to modify the loan terms or make other arrangements to resolve the loan, such as short sales or deed-in-lieus. What does this mean for you? It’s simple… more opportunities!

Walkability Matters.

In a study last week commissioned by CEOs for Cities, 94,000 real estate transactions in 15 markets were analyzed. In 13 of those markets, higher levels of “walkability” were directly related to higher home values. What is walkability? Simply, the walking distance to amenities such as schools, shopping, parks and public transportation. Controlling for other factors including a home's size, the number of bathrooms and bedrooms, age, neighborhood income levels, distance from the Central Business District and access to jobs, the study found that a one-point increase in Walk Score is linked to an increase in home value between $500 - $3,000, depending on the market, according to the study. The premium for homes in neighborhoods with above-average Walk Scores ranged from $4,000 - $34,000. Know that the walkability score does not apply to every market. For example, in Las Vegas, walkability is equated with lower housing values. But what does walkability translate to? Environmental and health benefits, better mass transit systems and not having to pay high gas prices. This is the first study that directly correlates housing values with walkability of the neighborhoods.

5 Things to Know About Short Sales

As we all know, short sales can be a very lucrative avenue for the savvy real estate investor. But, it’s not without its quirks. Short sales can be complex and lengthy, and it’s important to know what you’re getting into before you leap. Of course we have tons of expert advice and guidance we provide at SREC, but in a nutshell, here’s a few things to know about short sales:

  1. Updates could take months – While banks are ramping up their capacity to handle short sales, it still is not making the process any faster. During the wait, you won’t necessarily know the details of the process.
  2. Banks will deal, within reason – There are deals, but not always steals. Banks want to get these homes off their books, but not take a bath on them. Be smart and do your homework and be sure to provide all the necessary proof and paperwork.
  3. Sales are “as-is” – It’s not likely that you’ll get an allowance for repairs on the home. Know what you’re getting into by again, doing your homework.
  4. Have a back-up plan – Don’t put all your hope on one house. During the negotiations, keep looking for other opportunities.
  5. It’s not only about price – Factor in everything about the purchase – cost, repairs, resale potential, your exit strategy. As a successful investor, you will have more than one ace up your sleeve, so if it doesn’t look right, move on.

Empowered Buyers Handcuff Sellers

There’s a new, unexpected phenomenon happening in the housing market now that the $8,000 tax credit has expired. Buyers are essentially holding sellers hostage with exacting demands for multiple concessions. Sellers are often reluctant to refuse the demands for fear that the buyer will walk and their house will be once again on the market with millions of others. The buyers insist that they are being smart, even cautious, but for the sellers, the demands are often unrealistic. It’s a buyer’s market, and they are not afraid to walk if they don’t get what they want. In some cases, the seller just can’t afford the concessions – they would literally push them under water, forcing them to arrange a sale through the bank. It’s estimated that this phenomenon is happening in about 5% of sales, but in some areas of the country that number can reach as high as 15%. Experts agree that this is fallout from all the foreclosures. Buyers naturally assume that anyone who is selling is desperate to get out of their current home.

Do You Have What It Takes To Design Your Own Business & Lifestyle?

Are you up for the challenge? Are you ready to change your life and design your ideal business and lifestyle? This is not the type of contest where you submit your name to a drawing, sit back and we pick a winner. It’s much more than that. This interactive contest came about as a way to help you reach your goals and achieve your dreams in a relatively short time period. We want to push you to go beyond what you’re doing now and grow your business exponentially… by the end of this year!

The way it works is this. To get started, complete the B.L.D. Access Profile #1 and make a brief video and submit it to the SREC office by Wednesday, July 1. Check out one of the submission videos here! We start tracking progress on July 1 through October 31. Then, at the by November 20, you’ll complete the B.L.D. Growth Profile #2, which will “bookend” and complete your contest submission, along with a closing video. We want to see how much you can grow, both professionally and personally, during that time. This contest is open to all Platinum or higher SREC Coaching Students – whether you’re a newcomer or a seasoned veteran. While there are prizes in different categories, you’re going to be measured on your progress. So don’t think that if you’re just starting out you need to worry about someone who has been doing this for years – it’s all about your growth. Show us what you’ve got!

Attracting True Contacts

"True contacts," are those individuals who are not only pre-qualified, but predisposed to doing business with us. These are people who call on us, asking for our help. All we had to do was discover a way to make as many "true contacts" per month as possible, without breaking our budget. Here's what we've done, and what we are still doing:

1) Direct mail using personal letters to homeowners in foreclosure. CHEAP!

2) Cold calling and door knocking "the list" in our "sweet spot." Our competition never did this.

3) As our company matured and we had the personnel to handle it, we started marketing our company on TV.

4) Obtaining massive amounts of referrals from mortgage brokers, attorneys and real estate agents.

From these four different approaches we developed an automated marketing plan that never left us scrambling for deals -- instead we've had to scramble to keep up with the deals that come in!

Hope your week is filled with real estate investing success.

Until next time… ~Josh

Are you ready to learn about more ways to increase your profits? Take the first step to building your real estate investment business by registering to become a Real Estate Rebel today.

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