Spring is just around the corner and hopefully all of you are taking a little vacation. Judging by the amazing e-mail feedback we are getting about the lists, none of our clients seem to be sleeping, much less taking vacations!
I took a mini vacation and also did some business with clients on the Gulf Coast of Florida. The weather certainly helped lift my spirits after a long winter, but that was not the only thing that gave me positive energy in Florida. It was encouraging to see the improving conditions in the real estate market down in the Sunshine State.
True story --- a close friend of mine was in the market for a new home in Florida and he had been watching home prices fall, along with the number of closings. However, in the past two weeks closings have nearly doubled and asking prices are actually going up! Because of the weakened dollar, many foreign investors have been snatching up bargain properties, especially in vacation hotspots like southern and western Florida, Southern California, and Arizona. Our savvy clients already know this -- there are great deals out there to be made and now is the time to buy! With the trickle down effects of recent rate cuts, we are going to see the real estate market begin to recover by the end of this year.
Default Research is your spot for the freshest foreclosure lists in the country and also a "hot spot" this month for foreclosure education. We have included an article about where the best markets in the country are to invest, and David Ringold is back with another interesting article called, "Pre-foreclosures: How Fortunes Are Made." Good luck this month — if Florida is any indication of what might happen in the rest of the country, things are going to heat up!
Where Are the Current Hotspots in Which to Invest?
It is impossible to avoid hearing a foreclosure story when you turn on the news, and it seems like every real estate story is bad news! Well, I actually have some good news for our clients about three specific cities in the U.S. housing market. There are actually some hotspots around the country where the market has reached its low and now has the most potential upswing in prices. There are deals to be made!
(1) Charlotte, North Carolina — Charlotte has virtually avoided the foreclosure crisis and has a lot of positives for investors. There is a low cost of living, a high population growth rate, and one of the largest financial centers in the country. The home prices here in Charlotte will be rebounding soon, so go South where the living seems to be getting easier.
(2) San Francisco, California — The Bay Area has some of the most expensive real estate in the country and the new jumbo loan limit will help increase home sales in San Francisco. With a median home value of nearly five hundred thousand dollars, the new loan limit should get that market moving in the right direction. Home prices are already on the rise with inventories declining, so expect this market to be a San Francisco treat!
(3) Ft. Meyers—Cape Coral, Florida — This area is popular with foreign investors and especially Europeans. Ft. Meyers and Cape Coral offer a lower cost of living compared with the rest of Southern Florida (Broward and Palm Beach) along with more affordable housing. Summer is around the corner and this market will heat up and flourish as foreigners invest and many baby boomers move there to retire.
Am I suggesting for you to move to these areas? They all are wonderful places to live for sure — but why not just invest? Now is the perfect time to be a buyer in any of these markets. Our clients have professional advice and the most accurate foreclosure lists available... it's time to get out and buy some pre-foreclosure properties!
Default Research March Poll
For the past year, our newsletter, "The Homestand," has become the No. 1 resource for foreclosure information for many of our clients. We want to make our newsletter even better and we want your help!
Foreclosure Pitfalls 101
Choosing a foreclosure property is a difficult process that requires, among other things, knowledge of real estate, the law, and money. Even people who are well educated about the foreclosure process sometimes need a refresher course in what to be aware of when choosing a foreclosure property:
- Not all foreclosures are actually deals. Establish a fair price so that when the property is sold you will realize a profit. Foreclosure properties are inherently risky, so be sure to build a risk premium into the estimated value of a home.
- Get to the property early. I know I talk about this often, but our foreclosure lists give our clients the opportunity to be present at the pre foreclosure process. This is the way to go because the properties that make it all the way thought the entire process are generally not solid investments.
- Location, location, location! Did I mention location? When evaluating a property, be sure and look at the homes around and the neighborhood that surrounds the possible investment. If you see for sale signs and homes in foreclosure, you might want to think twice about investing in that property.
- Don't forget to factor in costs such as improvements, interest and taxes (while you hold the property,) and the selling cost.
- Do have a full title search done to ensure there are no liens or mortgages that you are not aware of on the property. Saving a few dollars and not doing a title search could be disastrous and cost you a lot more than a "few" dollars in the end.
- The money to be made in this market is using the traditional buy and hold strategy. Although a small percentage of investors can make money by "flipping" properties, the real money will be made by the patient investors.
Pre-foreclosures: How Fortunes Are Made
--By Jeffrey Ringold
All rights reserved.
What is pre-foreclosure? Pre-foreclosure is the time period from which the bank gives notice of default, once the homeowner is approximately 90 days late in payments, to the time the house sells at auction. Pre-foreclosure is also the most crucial time in the foreclosure process. It is during this period that you as an investor stand to make the largest profits and can literally make thousands of dollars in months, weeks, days, or even hours!
The key to pre-foreclosure houses is equity. Simply put, equity is the difference between what a house will sell for (fair market value) and what is owed on the house. The whole concept to making money with pre-foreclosures is to buy a house for less than fair market valuing, thus immediately creating equity for yourself.
Here is an example of how this can work. Let's say someone owns a house with a fair market value of $200,000. Now let's assume that this homeowner has lived in the house for several years. If you consider that the property has most likely increased in value over time, while at the same time the homeowner has been paying down the mortgage on a monthly basis, it is fair to assume they owe less than $200,000 on the property.
For this example let's assume that the homeowner owes $160,000. This means there is $40,000 in equity in the house. As an investor, you would want to buy the house for $160,000 or slightly higher. If you can do this, you have a shot at making $40,000.
I know what you are thinking. Why would they sell the house for $40,000 under the market value? Right? Here is one reason why. If they sell the house to you, you can promise them a quick closing, thus stopping the foreclosure (losing the house at auction).
This will prevent a foreclosure from going on the homeowner's credit record. A foreclosure can stay on someone's credit for seven to ten years making it next to impossible to get another mortgage in the future. This is just one of many reasons.
So let's say they sell the house to you for $160,000. You can turn around and put the house back on the market for the $200,000 that it is worth. Once the home sells, you could put a whopping $40,000 in your pocket. Sounds pretty nice, huh? The best thing is there are ways to make similar deals with little or no money! An that is an example of how you can make money with pre-foreclosure houses.
In order to buy pre-foreclosure houses you first need pre-foreclosure leads. This is how you are going to get your leads. You are going to implement a powerful direct marketing campaign soliciting those who are in pre-foreclosure. How do you learn where to start looking?
One of the most valuable sources for pre-foreclosure leads is mortgage brokers. Almost everyone knows a mortgage broker. Maybe your brother is a mortgage broker. Maybe a good friend is a mortgage broker.
If you don't know anyone in the mortgage business, network a little bit. I am confident you will be introduced to someone in the mortgage field that can help you.
If not, that is OK too! You will just have to do a little more legwork. Go through the yellow pages and look for mortgage companies. Start calling around and introducing yourself. See if you can talk to the manager. If not ask to speak to a loan officer.
Ask them if they have someone in particular that handles foreclosure financing. They may or may not. Often times in mortgage companies, they will receive large volumes of calls from distressed homeowners.
These are homeowners who are trying everything to stop foreclosure. Most of the time, it is too late for the mortgage company to help the homeowner because their credit is already shot. At this point the mortgage company may refer them to what is sometimes call a hard money lender. A hard money lender is a lender that specializes in high risk loans. Often times, they are private investors.
This is where you come in. These leads are invaluable. They are homeowners that are exhausting their last options to save their home. What you do is have the mortgage company start to refer these deals to you. If you can get the names and phone numbers of these homeowners, you can contact them directly. More importantly, you can contact them when they are open to listening and expecting your call. If the mortgage representative that can't help them gives a high recommendation of you to the homeowner, they will be excited to hear from you.
About The Author:
Jeffrey Ringold is the author of 'How To Build A Massive Fortune Through Real Estate Foreclosures'. He is a licensed real estate agent and investor who has bought or sold over $12 million in real estate over his 7 year career. He is consulted by leading real estate developers and investors almost daily.
Order the freshest leads from any Default Research county for six or more months and receive a free copy of, "The Pre-Foreclosure Real Estate Handbook: Insider Secrets to Locating and Purchasing Pre-Foreclosed Properties in Any Market.
Be sure to check out the forward in the free book written by Default Research President/CEO Serdar Bankaci. Again, to get your free copy, order any county for six months. To order please call 888-211-8396
What is the MOST IMPORTANT MOMENT in a real estate investor's life? It is the 30 to 60 minutes you are with a potential seller trying to get them to sell at a 20% to 50% discount to their homes value!
"Imagine Being Able to Consistently Get Seller's To Sell At A 20% to 50% Discount!"
Wonder if this is possible? It is if you are totally prepared and have a well- done professional presentation during that critical moment.
We use the list as a start-up for us and the information is not dated and not picked over like some of the other Detroit area lists. Some companies will make you wait for their leads while they work the leads all week themselves. All we get are their leftovers! Default Research gives the leads out earlier than any other company and we can get the mail pieces or calls out the same day — that equals success and success equals money.
Plus, Default Research gives the leads out early enough and people can get those mail pieces out the same day! Some companies will give the leads out on Saturday, but the mail does not move on that day — Default Research does not do that. The fresh and fast leads mean we are the first to approach the homeowners and therefore the first to try and make a deal.
I feel like if we get 500 people off the list we are able to help about 25-30 a month stay in their houses. We are able to do a good deed and also make several thousand dollars per deal. That is good business!
David Hieb
Wayne County, MI
I did tons of free trials on foreclosure web sites trying to find the company with the best foreclosure information. Not until I came across Default Research did I find the sophisticated data sorting criteria and ability to save information in different formats. Finally I had found the most accurate and quick information! I can even check out the foreclosure trends going one year back. Now, I am looking forward to years of working with Default Research!
Sang (Individual Investor) AZ
Maricopa County, AZ
I have heard from other foreclosure lead companies that their leads are the freshest, however the lists from Default Research are really the absolute freshest. Most other company's lists are 25-30 days old when they are e-mailed to you. By that time the homeowner has been contacted 20 times by competitors. Getting to a homeowner that late in the game there is no way you can make money!
I knew I wanted to go with Default Research because I wanted to be the first approach homeowners in distress. I wanted to get to them early and within one week of signing up with Default Research, I got my first sale from the list and started making money. I have found in a short time that persistency and consistency of using Default Research will determine your success in the pre-foreclosure market.
Here is some advice: for those individuals who mail out one letter to each potential client and give up and say it doesn't work, they are RIGHT. It won't work unless you work the program — remember persistency and consistency and — profits and cash.
Greg Talbot
Pima County, AZ
I'm just getting started and want to learn "everything" — there is so much! I do like the idea of helping people which was a nice thing about your list — there was that possibility.
Jackie Norvell
Wayne County, MI
The earlier I was able to get the leads was well worth the money because it meant more money for me in the long run. Some of the records I got from Default Research did not hit other sites for a week or week and a half. I was able to get to them earlier so the chance to work with them and help them was a lot greater.
Chris Brooks
San Diego County, CA
I was actually able to talk directly to the people with the leads that Default Research provided. Great to hear that your company is growing and providing investors with research that can truly save a homeowners property or help them find a way to get out.
Adam Chiasson
Wayne County, MI
I have tried several different foreclosure lists and Default Research is by far the freshest and most accurate. I switched over to Default Research two months now and I've been able to close two lucrative short sale deals netting me over $50,000. Before Default Research it would take me months to turn that much profit, now I expect it at least once a month.
Mike (Short Sales)
San Diego County, CA
I can't tell you how many times I used to call numbers of homes in foreclosure only to find out that the number was turned off. I can tell you how many times that has happened since I started using Default Research. The answer is none! Those homeowner phone numbers pay for the lists on their own. As a mortgage broker these leads are excellent and much better than those provided for free.
Lauren (Mortgage Broker)
Los Angeles County, CA
After being in the foreclosure business for over a decade now, I have seen almost every lead company. Every company claims to provide the freshest lists — Default Research does! Not only fresh, but accurate! The homeowner mailing lists allow me to find homeowners that have moved out of their houses. And, over 20 percent of my marketing mail came back to me as undeliverable. So far less than 1 percent of our mail has come back when using the Default Research information.
James (Real Estate Investor)
King County, WA
Talk about being the first to approach a homeowner in distress. How about actually notifying a homeowner over the phone that they were in foreclosure! It happened with the Default Research homeowner phone numbers. The phone numbers are crucial in getting to the homeowner quickly. Keep up the great work!