Pre-Foreclosure Q's

[Trevor Jackson]

Hello BP, I have recently started my venture in wholesaling, and plan to work my way up to eventually owning and renting out apartment complexes/vacation condos, etc... But for now, I'm 20 years old, broke, and have quit my 60-65 hr a week job. Ok so first off, today, I started to try to market to people who are currently in the "pre-foreclosure" process. I am using Zillow to find these listings, but it seems like the "Pre foreclosures" listed on Zillow may be out of date. Most of the homes I approached today (yes, I'm door knocking, and yes I know it's dangerous, desperate, etc etc...) were either weatherized or completely gutted and obviously already foreclosed upon or bought. Does anyone else have experience with using Zillow for pre foreclosure listings? Are there any alternatives as far as free (or very cheap) Pre foreclosure listings? Also, I want to know if there any successful wholesalers out there who have experience door knocking and can provide any tips? I know it's a long read and I'm asking a lot but any input would be greatly appreciated. I'm in Walton/Gwinnett counties, Ga if that matters to anyone. Anyways, thanks for reading. Cheers.

[Johnny Kang]

@Trevor Jackson

Yes, there's no shame in having a job. I struggled for many years, telling myself "I can't go get a job, I need to make my career in finance work because I know wayyy too many people who are financially independent", without considering the fact that although that's sounds great, when you aren't paying your basic bills and getting in to debt, that can really hurt your motivation to get up everyday excited about what you're doing; and it'll seep out of you and affect the way you interact with people; whether they want to do business with you or not, which obviously hurts your ability to make a profit. Having a job for now so you're not stressed out about money is very important; something which isn't talked about much.

I get my mailing/post cardcampaign leads from List Source. (I haven't used other sources, so I can't speak about them)

Like I mentioned you can split your mailing/post card campaigns in to 2 categories:

A) Properties with Equity. Send yellow letters to them. ($1.30/letter from yellowletter.com)

- Absentee (in state & out of state)

- Probate

- Estate sales

- Properties which had recent fire (your local fire dept. may or may not give you this info)

-FSBO (Craig's List, Kijiji) These people you can just call, since they'll most likely have their phone # on the ad.

Below is a letter I use to get about 3% response rate. 2000 letter -> 50-60 calls -> 10 motivated sellers -> 4-5 properties worth seeing -> 1-2 under contract. Ratios won't always be exactly like this, but you get the idea. On my list, I highlight the people that have called back, letters which came back to me as Un-Deliverable, so when I'm doing my drip campaign on the same list, I'm not sending letters to those who already called me back, or it was un-deliverable. 

Ellen's my business partner. We have her name first, cuz we think people respond better to females. Just our opinion.

B) Pre-Foreclosures. Send post cards. (about $.49 cents/postcard from Vistaprint). My response rate is about 2-2.5% on post cards, but gets better on the 2nd and 3rd drip campaign.

- Properties with no equity (short sale), since people who have equity that are in foreclosure can still sell their house and payoff the mortgage. (other’s in BP have talked about flipping those. I’ve never flipped a property in foreclosure that had equity. All my pre- foreclosures have been short sales). I prefer sending post cards to people in pre-foreclosure because a lot of them are mentally in denial. So why spend $1.30 sending them a letter, when I can spend about $.49 cents; and as soon as they get the post card at least they've seen the message, and decide whether to call us or maybe call us some other time. I do drip campaign for post cards as well.

C) Later on, when you've closed a few deals and you have the money, you can also target for motivated sellers by having an SEO optimized site and and doing PPC and google adwords, etc, which a friend is helping us with.

We are working on having a separate site for pre-foreclosure leads, so it's easier for us to track which lead funnel is doing what. Be sure to have separate contact info for each of your sales funnel. (i.e. yellow letters to one phone #/email, and a different phone #/email for post cards, and a different phone #/email for your online marketing.)

D) Also, consider finding a mentor who can help you. I wrote this response to someone asking about what they should do as a newbie starting out wholesaling http://www.biggerpockets.com/forums/93/topics/204099-wholesaling

I got my first deal under contract within a month of sending out 1800 letters, and closed on that the following month, netting $16,500 and haven't door-knocked since.

Go make it happen! :)

Johnny