REI Marketing Tips

I often get feedback not only in my own investing business, but also from students around the country, who get frustrated because other people, (often times realtors with whom they’re trying to network with) tell them that flipping short sales “illegal”.

This actually happened to one of my door knockers very recently. He was calling a home that was listed for sale (evident by the sign out front). After speaking with the owners and getting the agents contact info, he called the agent to let him know that we would like to write an offer on the property (tomorrow).

The agent said that his father had recently been to a DRE seminar here in California, and apparently a CAR attorney had told his father to “steer clear of double escrows”. (Important note: this is 100% hearsay, but let’s assume for the purpose of this blog post that the information is correct).

The agent asked us if we could “send him something” in advance of our meeting. I figured that this might be happening to other people out there as well, so I have included some of the email that we used, so you can use it in your own marketing as well.

Please note that the information below is meant for an email (and NOT a flyer) simply because it contains links. Feel free to copy and paste and use as you see fit:

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Recently, Freddie Mac, FHA and Wells Fargo have all made major changes to their business models to allow for short sale properties to be flipped, legally and ethically. In fact, that’s what me and my company, www.SaveMeFromForeclosure.com do.

Now before you get worried about thinking that we’re doing something “illegal”, I want to point you to 3 specific bulletins from these three major financial institutions that have been issued in the last 6 months:

First, in October of 2009, Freddie Mac released a bulletin that you can download here: http://www.freddiemac.com/sell/guide/bulletins/pdf/bll0924.pdf. On the first page of this bulletin is link to Freddie Mac’s Best Practices for Loans Involving Possible Property Flips, which can be found here: http://www.freddiemac.com/sell/guide/bulletins/pdf/bll0924xA.pdf. Most interesting to note is that Freddie Mac says that

“A property involved in a flip may be resold on the same day or within days, weeks, or months of the purchase. In some cases, the seller of a property flip never holds title to the property, but instead sells or assigns their interest in a contract to purchase the property to a third party.”

Freddie Mac then goes on to say that:

“Property flips are not inherently illegal and not all transactions involving a rapid purchase and resale are improper. Legitimate property flips are acceptable transactions in connection with loans purchased by Freddie Mac.”

Finally, Wells Fargo, who issued more mortgage loans that any other company in 2009, has now allowed their borrowers to buy properties that are being flipped by others. You can see this internal document that Wells Fargo mortgage lending released at the beginning of 2010 here: http://www.macedesigns.com/clients/srec/WellsFargo.pdf

So why is this significant? Three MAJOR players in the United States housing industry are changing their policies and business practices to allow for short sale flips and for homeowners to get mortgages where the seller is “flipping” the property to the buyer.

I’m sure you’ll agree with me that if 3 big time banking giants like HUD, Freddie Mac and Wells Fargo are making these changes, they’re accepting the legitimacy of short sale flips and them as a viable way to help eliminate foreclosures and help rebuild and stabilize the housing market.

In fact, last fall, before 2 of the 3 major announcements were even released, Mr. Lem Marshall, Special Counsel to VAR (the Virginia Association of Realtors) posted an article in their Commonwealth Magazine, a publication that is “A journal for real estate professionals published by the Virginia Association of REALTORS®”

You can read the entire article here.  (The main article is on page 12 of the publication, which is page 14 of the PDF), or, if you prefer a quick 2 page PDF document extracted from the magazine covering this very specific topic, you can download it here. What’s important to note, however, is how Lem ends the article, and his analysis of short sale flips, with the following paragraph:

So who loses? Nobody. Even the tax collectors and insurance folks come out ahead, as they get payments from owners making productive use of the asset. We all gain when inefficiency, uncertainty, and waste are squeezed out of the system. And we help hasten the return of reasonable market valuations, something of great benefit to our communities at large.

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Hopefully that the information can help you in your business.  I would recommend writing the email in your own voice, or even taking the information above and making a 2 or 4 page flyer that you can use to market to agents with short sale listings.  I’m actually in the process of doing that myself, and it will be made available to our community of exclusive SaveMeFromForeclosure.com local representatives.

However feel free to copy and paste any of the information (and links) in this email and use it in your marketing.  I would love get your opinion on what we’ve included here, and how you’re using it in your business, if at all.

Also, if you have any success stories (or challenges) using this information please feel free to post them here in the comments section.  We love hearing success stories, but if you have any challenges using this hopefully as a community we can help you further.

Happy Investing!

Thanks to everyone for their patience, as I FINALLY had time to get the free short sale training from California’s #1 Short Sale Lawyer posted to my blog. I will warn you in advance, Ron and I went for nearly THREE hours of non-stop hard-hitting short sale information.

Set aside some time this week to watch this training. There’s no cost, and after you watch it, please post a comment below and I’ll make sure that either Ron or myself answer it.

Happy Investing!

I constantly get asked by students and members of our community what is the best way to “convince” realtors to work with them.  Some of the more common feedback I hear are things like:

“The realtor told me what I’m doing is illegal”

“I can’t list the property because I’m not on title”

“No realtors will work with me because the say you can’t do that in our city/county/state”

Well how about if I gave you a link to an article in Commonwealth Magazine, a publication that is “A journal for real estate professionals published by the Virginia Association of REALTORS®”

And what about if that article was written by Lem Marshall, VAR (Virginia Association of Realtors) Special Counsel and it basically says (and I’m paraphrasing here) “Who cares if an investor has an option contract, and who cares how much profit they make, and who cares if the end (C) buyer is taking title from someone they didn’t expect”?

Would an article written by an attorney endorsed by a state’s (Virginia’s) Association of Realtors help validate the way you want to structure your transactions?

I bet it would!  (By the way, if you invest in the state of Virginia you should absolutely be drooling right now…)

I want to personally thank my main negotiator Ed for sending me the link to this article.  I am sharing it here in a format where you can share it with your realtor prospects.  This is a GREAT thing to share with any agent who has a short sale listing that is still active, with no offers.  Just think, by using this tool you could have 5-10 new short sale deals in your pipeline by the end of the week!

To get access to the ENTIRE September/October 2009 edition of Commonwealth Magazine, “A journal for real estate professionals published by the Virginia Association of REALTORS®”, you can check it out here.  (The main article is on page 12 of the publication, which is page 14 of the PDF).

However, if you prefer a quick 2 page PDF document extracted from the magazine covering this very specific topic, you can download it here.

After you access and read this document, please post a comment below!  Let me know if this helped you gaining the confidence with realtors, and if you got any new deals under contract because of it.  We love hearing your success stories.

Oh, and one more thing…take a look at the blog post below, and make sure that you check out the video about guaranteed funding.  You’ll be glad that you did…

Wednesday I had the pleasure of having lunch with California’s top short sale attorney.

He was kind enough to let me pick his brain on certain nuances that come up in California.  More importantly though, he gave me some great insight on what is going on around the country, not just in California.

I took a few pages of written notes, and even more mental notes, but here are a couple of big take-aways that I wanted to share with you:

1.  Deals you find by yourself are best, but better if you take care of agent out of the goodness of your heart.
We discussed at length doing deals where the property is already listed, and we both agree that trying to convince many agents that our “creative” way of doing short sales can often be a frustrating experience, and a waste of time.  That’s not to say that it can’t be done, but we both agreed that if you have good marketing, and can get to the seller directly, you’re in a much better position.  One idea he shared with me was to allow a realtor (one that you have a good relationship with, or one that you’ve been trying to court into getting all of his listings and buying them) is to let them represent you on the transaction.  The banks are used to paying a commission anyway, so why not throw someone a “bone” and put some money in there pocket.  This idea was taken a step further by even suggesting to the homeowner that they might want representation, and providing them with an agent (referred by you of course) to put a smile on the face of a couple of agents…which could lead to a lot more deals for you!

2.  Keep your paperwork consistent
We had a standard practice in our business of using one contract for deals where the property was NOT listed, and another one for listed properties to keep the agents happy (by seeing a familiar contract).  He pointed out to me that I’m making things more confusing for our acquisition specialists by making them have and complete 2 different sets of contracts.  “Standardize” he said, and make the contracts work for all transactions, realtors involved or not.  Made sense, and we made that change in our business today.  (NOTE: some of you might be thinking “you sure are a bonehead Justin” and while that might be true, I’m far from perfect, and learn new things in this business every day.  I have no problem admitting if I’ve made a mistake or not doing something the best/smartest way possible).

3.  Pay your “A” listing realtor well
If you’re going after listed properties, pay the “A” realtor well.  They’re getting paid on the discounted price, so why not pay them 4% instead of the “standard” 3%.  This will show the “A” listing agent that you’re serious about putting money in their pocket, and make them more motivated to work with you in the future.  If you pay 4% realtors will be excited about working with you, and the “word” will get out that you’re a serious investor who takes care of agents

Those 3 ideas were just the TIP OF THE ICEBERG…

We discussed a TON of other things, and we finished lunch with a LOT more to discuss.  Fortunately for you, I’ve arranged for a special training with this attorney.  It’s not until March 31st, but go ahead and block out that time in your calendar NOW.  We’ll be covering lots of great information, and of course I’ll remind you closer to the date.  For now, put Wednesday, March 31st at 6pm PST/9pm EST in your calendar.