The Unspoken Market….Where To Find 100’s Of Buyer
August 27, 2009, Writen by: Chris Anderson, Ph.D
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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:
|
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.
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