Surviving and Thriving as a Real Estate Agent: Part 3

In my last two articles, I have discussed how real estate agents can not only survive, but thrive in this challenging real estate market.  I have covered the first three points in my four point plan:

1. Develop Your Niche
2. Become An Expert in Your Field
3. Be Mobile/Adapt
4. Develop a Marketing Campaign

Today I will cover the final point: Develop a Marketing Campaign.

Once I have developed my niche and determined specifically where I am going to invest and recommend that my clients invest, I create my marketing campaign to go find the investors.  I could easily write an entire book just on marketing for real estate agents, and I look forward to sharing more articles with you in the future on this topic, but for now I will share a few brief thoughts here to put you on the fast track. The marketing materials that I use are designed to aid the investor in making an informed decision on the investment they are currently considering. 

• The first item in this package is the “e flyer.”  This flyer is a colorful,
eye catching marketing piece that lists all the features and benefits of
the potential investment in a concise, easy to understand format.  I
send these flyers out to investors in the form of email blasts and
their purpose is to catch the investor’s eye and encourage them to read
more about the investment opportunity that I am offering.  To view an
example of one of my recent investment
flyers:www.viewpointequity.com/MGMFlyer.pdf  
• The second item that I include in my marketing package is a
proforma worksheet.  I have always used proformas to analyze
my own investments and I find it is an excellent tool to share
with my clients as they consider similar investments.  If the proforma
is done well and accurately, it will not only aid the potential client
in understanding the financials of the investment, but it will also
build your credibility in the eyes of your customers as not just a
Realtor, but a seasoned investor that actually understands the
investment process.  Having actual numbers plugged into a spreadsheet
gives the investor a sense of comfort with you and with the investment,
and helps to eliminate the feeling of the “unknown,” especially for
new investors.  All-in-all creating an informative and professional
marketing package for the properties that you are looking to sell
and including realistic projections and other data helps investors
to accurately evaluate a deal and establishes valuable credibility for
you that will result in repeat business, referrals, and client loyalty.
• Another tool that I use with outstanding results is my monthly
newsletter.  Different than a typical “Realtor” newsletter that might
feature recipes and other useful but non real estate related information,
my newsletter is filled with statistics, actual deals, potential
deals, education and opinions of the market in which I am currently
working.  Sending this out to my database on a monthly basis allows me to
stay in front of them and remind them that I am always looking for the
next best deal when and if they are ready to get involved.  To see my
latest newsletter: www.viewpointequity.com/newsletter.pdf
• My final, and perhaps most important marketing strategy, involves not what
I do, but what I don’t do.  I have found that my strengths as a
business person lie in my abilities to create leads, talk to clients,
sell properties and negotiate deals.  My strengths do not lie in the field
of internet marketing or graphic design.  Because of this, rather than
spend my time working on my own e flyers and newsletters, I employ an
internet marketing/graphic design firm to handle these details for me.  When
I am ready to create a marketing piece, I do the overall concept
management, writing, thinking, and analyzing and forward it on to
my specialist for the design of the marketing materials.  Once back to me
I make suggestions and changes to put the final touches on the material. 
I suggest that you too spend more time on the areas in which you
specialize and less time playing with graphic design programs on your
own computer.  This one idea (the virtual marketing assistant) has helped
me tremendously in getting more effective marketing material produced
faster than I could otherwise produce myself, leaving me free to
pursue sales.  If you are interested in contacting the firm that handles
my marketing, you can reach them through their
website:www.spiraldigitalmedia.com

If you follow these four simple steps, you will be well on your way to thriving as a real estate agent, even in a down economy.

How to Profitably Invest in Foreclosures

Within the realm of real estate investing, each type of investment (foreclosures, fixers, land, REITs, etc) has its good and bad times to buy. To be a successful investor you need to be able to identify not only which type of investment is the best at any given time but also which sub-category within that investment type you should look to specialize in, and when in the market cycle to buy.

Perhaps you are new to real estate investing (or not) and have heard that foreclosures currently abound and offer the best way for investors to gain instant equity in a property. This may well be very true. But the designation "foreclosure" is a general term comprised of many types of properties. Understanding the different types of foreclosures, where in the time line a particular foreclosure stands and which type of foreclosure offers the bet deal is critical to your success as an investor.

Along the time line of the foreclosure process, there are three basic areas that present buying opportunities for investors. The first of these has investors buying before the foreclosure auction. The second opportunity comes through buying homes directly at the auction. The third and final possibility is to buy properties after the auction is over, either directly from the bank or from an auction company. These bank owned properties are referred to as REO's or Real Estate Owned. Each of these stages in the process provide unique benefits as well as challenges. The smart investor will need to contrast the pros and cons of each method in order to find the best and safest investment opportunities within the broad field of "foreclosures."

The first opportunity for foreclosure investors, buying before the auction, encompasses the period of time when home owners are behind on their payments and realize they are in danger of losing their home but have not yet been foreclosed upon. This sub-category will include listed properties from the multiple listing service (MLS), short sales, notice of defaults (NODS) and notice of trustee's sales (NOTS). For a number of important reasons, this is not a good time for anyone to be attempting to sell a home through "normal" retail channels. The sluggish nature of the housing market, the excess low priced inventory on the market, lending resrictions, and the anxiety of potential buyers willing to sit on the sidelines and wait for conditions to improve combine to make selling retail nearly impossible for most home owners. Sellers cannot compete against foreclosures so unless they too become a foreclosure they have no viable way to sell their home. This means that we as investors will have a very hard time finding a property to purchase with equity in it, at this stage of the foreclosure process.

There is one segment within this first stage to which we should direct a little bit of extra attention: short sales. A short sale occurs when an owner is in trouble and a potential buyer comes in and negotiates with the bank to purchase the property for a value less than the amount owed on the loan. This provides both a potential solution to the home owner and a way for investors to get a home at below market value. The downside to this method is that with the huge amount of foreclosures blanketing the nation, short sales are taking way too long to complete (4-6 months on average) or aren't going through at all. Some recent statistics show that only about 20% of short sales actual close. There are still many companies, Realtors, and investors that are quite successful in short sales, but this niche is difficult and not one in which most investors find success.

The second opportunity for investors comes through buying properties at the foreclosure auction or trustee's sale. Note that some states liquidate foreclosures through judicial proceedings, while others, like California and Nevada, have trustee's sales that are held on the courthouse steps. The positive side of buying foreclosures at auction is that the competition for the property you are looking to buy is not usually all that stiff. However, in trust deed states you must have cash or the equivalent of at the time of the auction to be the winning bidder. This eliminates a huge majority of potential buyers as most folks do not have $100,000 or more easily accessible in cash. Because REO properties are now selling for levels under amounts owed on comparable properties in the (NOTS) stage, buying at the trustee's sale is not a viable way to buy in most situations. Most properties brought to auction at this point are failing to sell for asking price and are reverting back to the banks and becoming bank owned REO's. Again, there are professionals who are buying good properties at trustee's sales and auctions, but it is not an easy way for a beginner to break into the foreclosure arena and it is a very small segment of the market at this time.

By far the best, easiest, safest, and most lucrative way to buy foreclosure properties at this time is during the third and final stage of the process: when the properties that are not sold at auction revert to the banks and become REOs. Because of the huge volume of foreclosures now on the market and the record numbers that will be coming in over the next 12-18 months, banks are lowering their prices daily just to move inventory. Banks are also, in many cases, placing homes with listing Realtor agents that specialize in selling REO homes.

If the properties do not sell in a 60-90 day period (after initial price discounting) many properties are going back to the bank and being re-listed t an even lower price with an auction company or sold off in bulk REO portfolios of $5 million and up for literal pennies on the dollar. Another benefit of bank owned properties is that they are almost always vacant, making it easy to get inside and inspect them before purchasing. This is usually not the case when purchasing in other stages of the foreclosure process where most homes are still occupied by owners or tenants.

As an investor and licensed Realtor that has bought homes in all stages of the foreclosure process, both for myself and for my investor clients, I am advising my clients to take full advantage of what could be one of the best foreclosure buying markets we will ever see. I personally am based in the Las Vegas area and I have seen the Las Vegas real estate market go from the #1 hottest in the nation in 2004, to one of the slowest in 2007. In 2009 volume is increasing and Las Vegas is once again becoming one of the best and busiest real estate markets in the U.S. There is one thing and one thing only that is driving this change: foreclosures.