Short Sale investing is the least risky and the most leverage strategy for new investors to make money in pre-foreclosure investing generally. However, this is only true if you know what you are doing.
It requires literally almost nothing in capital to start investing in pre foreclosure by way of short sale. Many people initiate short sale process that they cannot finish. They usually get frustrated out of the business anyway. No wonder, out of all the pre-foreclosure or real estate investing strategies, short sale still has the least number of experts doing it successfully.
There are lots of pitfalls in the short sale and pre-foreclosure investing business. Committing some of the most common early mistakes will cost the investor time, money and the likelihood of any success. If you know them now, chances are you will avoid them. In Pre-foreclosure, it can get very messy if ignorant.
Let’s assume someone calls from your pre-foreclosure direct mailing and you got into the short sale process, what would be the next thing you would want to do? Double, or even triple, your chances of closing, right? How do you get this baby out of pre foreclosure?
Here are some powerful tips on how to boost your chances of closing ever on your short sale and pre foreclosure investments.
1. Join Your Local Real Estate or Pre Foreclosure Investment Group
Go ahead to Google and research a local real estate investment group by simply searching the phrase. There is no amount of books that can teach you the street smart strategies that you are going to need to survive the pre-foreclosure investment business or any other kind of business for that matter. You can usually join for free or a little fee. You will learn a lot by just simply being around successful people or people that aspire to be successful like you.
It is amazing how many people out there trying to start short sale or pre-foreclosure investing without networking. Networking is part of leverage that you will need in your short sale investing business. There is a better chance of learning with from an actual short sale expert than just reading a bunch of short sale theories combined by a mortal or opinionated human like you. Do not get me wrong, you will need to educate yourself on many of the short sale theories.
There are several factors to consider in selecting a short sale or investment group to join. Choose the ones that have meetings at least once a month, and ask whoever you speak to if there are short sale experts among the group. You are asking this because at the group meetings, you will find people always having conversations about short sale.
Make sure that they have an online forum like on yahoo group. This is the 21st century and you need as much information flying around every second and you don’t want any of it to pass you bye. There are consistent changes in the short sale processes and rules with the banks at all times. The group may even have pre-foreclosure listings services or even for free.
Also make sure the group has a solid track record of bringing speakers and education investors. If you cannot seem to anyone by phone in a timely manner, dump that off your list and call the next contact until you find a better one. You might want to direct mail one of your pre-foreclosure letter to their address. The building may be in pre foreclosure
There are usually about 3 or 4 with good track records within 50 miles radius from anywhere you are located if you are in the United States. Be very picky and pick the best that is most relevant to pre foreclosure or short sale investing.
2. Put Your Team Together
If you don’t have a short sale closing team, you should not be initiating a short sale at all. You should not be making any attempt to contact a pre-foreclosure homeowner on helping them. No one individual can complete a short sale transaction process by themselves.
Of all the exit strategies available to profit in pre foreclosures are being taken advantage of. This is not about having people on you payroll. This is much related to your networking discussed earlier. The professionals that you will need on your team are probably VIP or vendor members of the group you joined.
You need an attorney who understands short sale. Many real estate attorneys do not understand short sale or pre-foreclosure investing. Lucky you, most attorneys that you would find in a real estate or pre-foreclosure investment group would understand short sale or pre foreclosure investing. Most importantly, they need to understand creative real estate investing.
You also need a title agency and as discussed earlier, get those who are members of you creative real estate investment group. Get them to refer you a savvy mortgage loan officer. Preferably, make sure they invest in pre foreclosure too. If they don’t they have clients in pre foreclosure to refer.
This part of your short sale business is crucial. They don’t work for you but they work with you in order to close every short sale deal that come on their desk. They often find solutions rather than saying no. They are business men and not employees. They are accessible at all time by phone or e-mail. This is a delicate one for your pre-foreclosure investment business and it can make the different between success and failure.
3. Consistent Marketing
Of course, you will be marketing your service to a pre-foreclosure mailing list. Do not quit after sending after one direct mail–this should probably sound familiar to some people. The worst thing that can happen to a new pre-foreclosure business is to close down after 2 or 3 mailings because there are no calls.
The rule of thumb is to mail for 5 years, every other week before complaining. This literally means you should never quit. And don’t worry; it won’t be five years before you start getting calls from pre-foreclosure potential clients.
We all pray that the world economy will get back on its feet. However, there will always be house in pre-foreclosure since there will always be misfortunes in life.
The key to a successful pre-foreclosure listing direct mailing is consistency. It can’t be stressed enough. After all, you can control and tweak your budget to whatever is comfortable for every other week; and pausing periodically is not an option either. Your pre-foreclosure direct mailing has to be periodically steady.
Ok, so these may not be all you need for short sale business success. But then, these are the top 3 reasons why many short sale businesses failed even before starting. These gives you an idea of what to watch out for if you are getting lazy already or if you are a new short sale or pre-foreclosure investor.
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