The Unspoken Market….Where To Find 100’s Of Buyer
August 27, 2009
In the last update, we shared with you how we are getting 2-3 house showings per day from realtors in our area. Short story is we have a home type that is in demand:
But suppose your market is not quite as strong or maybe you want to increase sales volume even more than MLS sales will allow.
There is a major, untapped market right now that very few people have figured out how to service. Now, I am getting ready to use a very dirty word….. The Subprime market.
Even for first time homebuyers using FHA loans, they need 620 FICO scores to qualify for a loan. Do you have any idea how many people DO NOT meet that criterion? But did you realize that many non-qualifying buyers can qualify within 2-4 months if put into a QUALITY program to improve their credit. In many city’s, if you can realistically and ethically work with this type of buyer, then frequently you can be the only game in town.
So, suppose that you had a home and offered to buyers with this type of ad:
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3/2 Bedroom home, $975/Mo, freshly remodeled, fenced backyard, new tile/carpet. Financing available, bruised credit ok We specialize in working with those that cannot qualify. |
In many locations, if you run that on Craigslist, or street signs, or flyers, or……,
Your phone will ring off the hook. Why? Because many people either know, or believe that they cannot qualify today but they still would love to own a home.
Now, how do you turn that knowledge into real profits in your pocket? Unfortunately, if you put in many non-qualifying types via something like a lease-option, it will not work out well. Most will not fix their credit and few will close you out.
However, suppose you were partnered with a major mortgage group that also had a high quality credit repair group. Then, when you had a good prospect, you could turn them to the mortgage group and then get estimates of time to repair. In turn, you could put the person into your home on a very short term lease-option, with the idea that they would be buying this home from you within 3-5 months.
Sound risky and dangerous? Far from. In fact, there is a major, national real estate brokerage (intentionally have withheld name) that is gearing up to do this across 50 states. It turns out that if structured properly, you can really create a powerful system to acquire and resell properties at very nice price spreads.
In fact, I just had one of our buyers look up what we paid for the home (1/2 of what she is paying us) and complained but I showed her the appraisal that proves that she is getting a fair deal…… and we are fixing financing for her. I asked if she still wanted to move forward and the answer was a resounding ABSOLUTELY!
The purpose of introducing this concept to you is simply to make you aware that this opportunity probably exists in your area as well. You will definitely need to do your homework on the approach and put some team members in place but it can be an outstanding market.
Where Real Opportunities Are In This Market: Our Case Study
August 26, 2009
I know we have been silent for a while here at NoBullRE.com. Quite simply, we have been busy doing real estate for our own accounts. Depending upon your location, you may be sitting on a small gold mine and don’t even realize it. In this upcoming series of articles, we will be providing an overview of what we are finding in our own market: Tampa, Florida. From the discussions that we are having with others around the country, you may find your market to be similar (and profitable).
So, over the next few days, here is our list of topics:
- How We Are Getting 2-3 QUALIFIED Buyer Showings PER DAY, PER HOME.
- The Unspoken Market….Where To Find 100’s Of Buyers
- The Investor Myth: Why You WON’T Get Real Homes At 50-60 Cents On Dollar
- How You Can Safely Profit From Us (And Probably Others)
We are getting ready for a big house sale in Tampa so I will do the best I can in getting this material out on a timely basis. However, we believe that for many of you around the country, it is important to learn from what we are seeing on the streets daily. Hopefully you can learn from our experiences and then profit.
How We Are Getting 2-3 QUALIFIED Buyer Showings PER DAY, PER HOME
Ever single day, I get 2-3 calls from realtors wanting to show our homes to first time home buyers in Tampa. So what is our secret? Let’s explore the possible reasons:
- We Are Selling Dirt Cheap To Home Buyers: No, list price is 92% of fair market (and appraised) value;
- We Have Spent A Ton Of Money Upgrading This House: No, our total rehab cost were $9,2000 and consisted mostly of painting, flooring, small repairs,
- We Are Paying Extremely High Commissions To Realtors: No, we offer 3-4% to selling agents, just like everybody else in town;
- Our Internet Marketing Is Dominating The Area: No, although we are big on internet marketing, it plays very little role in the area with simply listing on MLS the dominate factor.
Give up yet? Boy, this would be the perfect place to pitch a brand new course and all you have to do is pay XXX to get our wonderful secrets….. but I will make it even easier for you:
THERE IS REAL MARKET DEMAND FOR THESE HOMES
Let me explain. As we started to do our homework around Tampa and meeting with realtors, we kept hearing the same story, over and over again:
- 80-90% of the for sale market is short sales & bank REOs;
- New first time buyers just want to buy a house, not wait 6-9 months on a short sale or have to pay cash for a bank REO (and then fix it up);
- Almost all other properties actually for sale by owners are priced too high because they are upside down
Simply put, if you have a decent house, in move-in condition, and not a short sale, it will get traffic (in the right areas). One thing that most people don’t realize is that there is a good volume of people out there that did not own property in this latest RE crash. These first time buyers are sitting pretty and just licking their chops to find a good home and be able to buy for less than they are paying in rent. Realtors in Tampa are telling us that this is the best market they have seen in 3 years. All the while, the newspapers are still full of gloom and doom.
So, here is a tip for you. If you are interested in an area or even an investment property that somebody is trying to sell, call three realtors and tell them you are considering acquiring a property and turning around for resell. Talk to them about the market, realistic prices, etc. You may find out that you have a great opportunity already waiting for you.
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