All Forum Posts by: N/A N/A

I thank you, I have a better understanding now. I have learned a few things since posting my question. Originally I made some incorrect assumtions.

I thought that we would get in contact with the home owner early on in their foreclosure (with several months before the auction), and that people were rational. If that were the case I thought that if you were honest with them you would have to tell them to list their house with a realtor at a very fair price to move it quickly, end foreclosure and maybe get some equity.

What I have since learned is that the majority of the people wait far too long and don't contact us until it is basically too late to sell via traditional methods. Accordingly you can be honest and tell them the best thing to do is to sell their house to you as you can close in 5 days.

But when you meet with them, do you tell them the best thing to do is they should sell their house? If they do that, you won't get the deal though.

If a home owner has equity, why wouldn't they just sell their house instead of going all the way through foreclosure?

Don't get me wrong, I beleive there are good deals in PRE-foreclosure and you can get homes for relatively little, but I don't understand why a homeowner wouldn't just sell their house if they had equity?

Thank you for your feedback. Please note, I believe in pre-forclosures. I just want to learn and understand pre-foreclosures from ALL perspectives so that I will be more effective and understand the marketplace-- not just the steps to follow.

Look forward to more comments.

I have read 6 preforeclosure real estate books, but some of the most important macro questions don't seem to be addressed in them.

Investors are ultimately looking for a deal that has equity and you can flip with at least a 20%+ profit margin (unless you are doing a short sale).

Question #1: If that's the situation, why wouldn't the home owner just sell their house and do the same thing?

The home owner may not have the money for payments, and poor credit preventing them from tapping into the last 20% of equity, but they could still sell their house. The only reason I can see is if they waited too long and don't have time to sell before the auction.

Their are a few unique situations: 1. not educated to know that, 2. Denial 3. Divorce--even if it's in their best interest, they would rather make their ex-suffer by destroying eachother, 4. death, no one to do it. 5. simply waited too long before choosing to sell. These must be a small portion of the foreclosures.

Question #2: Is the only thing we are banking on is their ignorance?

Most of the seansoned people are saying you should approach the preforeclsoure with the intention of helping the people and building a relationship.

Question #3: Do you really tell them what there legitimate options are? If it has good equity, they will sell it on their own and you lose the deal. If it has poor equity, you don't want it anyways (unless doing a short sale).

Qustion #4: There are special circumstances (such as short sales and rehabbing) that give an investor a comparative advantage over the the home owner and are where the investor adds value. Barring those 2 situations, what is the value-added that we as investors can bring that he homeowner can't?

Qustion #5: It seems that marketing to owners late in their foreclosures would be best since they don't have time to sell. Is this correct?

Question #6: Is the answer to all of the above -- the deals that are apealing (the ones with equity or that you could make money on) are the ones where the owner waited too long to sell, they are uneducated, or simply don't care. Or they have little equity but are good short sale candidates? Does that sum it up?
Thanks!

Juz-

Thank you very much for your input! I will PM you details of my results.

I am experienced at direct mail and would like to utilize my experience to improve foreclosure direct mail success rates (I owned 2 printing companies and an ad agency). However direct mail marketing to individuals in foreclosure is a new and completely different market and psychology than the traditional markets I am used to. I have some questions that are best answered by experienced pro's. I am a newbie who is going into this full time with dedicated research and resources here in Tampa.

Part 1
I was planning on designing high-end direct mail pieces (creative, high-end, die-cut, spot UV coatings, large oversized postcards, brochures and letters). My costs are very inexpensive and are not an issue. However it appears to be a universal theme that this is NOT a good method. Everyone recomends just the opposite--plain white envelopes, no business name, even handwritten. The receipients get inundated and throw almost everything out. I agree that if you are going to do a regular letter, its necessary to be discreet on the envelope to get it opened. However most people don't have the direct mail, printing, graphics resources I have. The question is this: In my situation, would you still recomend the plain Jane apporach and call it a numbers game, or would you stand out of the crowd with professional, corporate, highend direct mail and personalization piece?

I was planning on sending oversized postcards (but being discreet about the services as not to embarrass or announce to everyone they were in foreclosure), sending personalized letters and postcards via Priority mail overnight envelopes, and doing some of the plain-Jane approach. What's your take/recomendations?

Part 2
What frequency are you finding most successful? I was planning 6 letters to each candidate, spread out roughly ever 3 weeks until 2 weeks before foreclosure (1X per week last 2 weeks).

What time are you finding the most success? Soon after they get notification of default, after it sank in, or at panic time 1-2 weeks before the planned auction?

Part 3
To keep it discreet and annonomous for people, I was going to have a website with free resources to help and educate them to hopefully build a relationship with them. Help them, and they may be more likely to choose you in the event they can't help themselves. Has anyone had experience with marketing foreclosures via the web -- more specifically directing your direct mail audience to your website.? (most proably don't have an Internet connection, but many may still have one)

Part 4
Has anyone gone so far as using Fedex? I can send an overnight letter for $6. $6 x 200 month= $1200/mo. ROI worth it if you get even 1 extra closing.

Part 5
I was planning on conducting an on going survey by directly contacting the people who receive these notices and get their real world feedback. It will be hard, costly and time consuming, but I beleive will help tailor my approach to my market here in Tampa in the long run. I will be happy to pass on the results to those that help.

Part 6
Anyone have experience with Shark Bait Software? Would you recomend it? What foreclosure software do you recomend?

Part 6
Do you have success with classifeid newspaper advertising?

Thanks for your feedback. :wink:

Anyone have experience with Shark Bait foreclosure software? About to purchase it. Would you recomend it? Seems like an efficient way to conduct direct mail but would prefer real world feedback as opposed Shark Baits Press releases/hype.

Thank you!