All Forum Posts by: Robert Davidson

IMO Zillow is not good.  Always be aware that you get what you pay for when using a free site.  IMO one of the best sources is Realty Trac.  It is a subscription site but the cost per month is reasonable.  I use a site (paid) that is specifically for the western states but have also used Realty Trac.  Also, it provides information on real estate in general and foreclosures specifically.

I like that other investors believe that door knocking is "dangerous and desperate."  It eliminates a lot of competition.  Nothing beats face to face discussions. You may have to go back several times maybe with a different flyer or newsletter to gain their confidence.

Obviously don't go to war zone neighborhoods.  It does take effort, all lead sources do.  My goal, and that of two other investors I know here is to door knock a minimum of 15 doors a day, at least three days a week, including neighbors to learn when the owner is home.  If not at home, have a brochure or flyer, in an envelope, to leave attached to the door with masking tape. 

As to yellow letters, IMO their time has long passed.  I've been in homes where the owner had well over 50 yellow letters all saying essentially the same thing - I want to buy your house.  How would you respond to junk mail, which is essentially what a yellow letter has become?

I agree that Zillow is very inefficient and not worth much.  For a list of foreclosures ( pre and auctions) Realty Trac is good.  It's a subscription service but IMO very reasonable.  Also, in Georgia there is an (again, IMO,) excellent teacher, Tony Youngs who specializes in teaching about the Hidden Market - foreclosures, bankruptcy, buying junior liens, etc. 

Another point that most new investors don't realize is that any marketing, direct mail, door knocking, phone calling, etc. always has and always will have a very low response rate  the first time.  Maybe a half percent.  Teachers of direct mailing all say that real success comes after 8 - 11 contacts.  I mail 500 letters a month and I know investors who mail 1,000 a month, and one mails 5,000 a month.  And response rate is irrelevant, it's conversion rate that gets you the house.

There is a skip trace service findtheseller.com  I have used them very successfully.  You may need to contact relatives, but those are listed also.

Two sources for foreclosure leads are RealtyTrac and Property Radar.  Both are subscription but IMO very reasonable.  You're wasting a lot of time with Zillow and checking tax records.

It's irrelevant if the house in foreclosure is owner occupied or occupied by a renter (maybe not paying rent.)  You may have a couple of hoops to jump through on non-owner occupied but check your state foreclosure laws with an attorney.  Paying for an hour or two consultation with a real estate attorney will be well worth it.   In California if a tenant is occupying a foreclosure they have to be given 60 days notice to vacate.

I agree about making contacts.  Find a real estate investment club in the area (most meet once a month) and also search Meetup groups.

A good source for investment houses in the Indianapolis area is HUD owned houses. There is an excellent book (in my opinion) called HUD Home Buying Secrets by John Adolfi. He's a realtor in New Your specializing in HUD homes. HUD process is the same everywhere.

Contact the family members.  If the bank files for foreclosure, that will take months.  Even in foreclosure, you can purchase a house from the homeowner.  The question I have is was the estate put through probate or was the house in a trust where the family members automatically obtained ownership?

Also, learn your state's foreclosure laws.  Maryland has very strict and onerous foreclosure laws.

There may be a specific contract form for use in buying a foreclosure.  If the house has not yet had a foreclosure notice filed, then you may be able to use a general Purchase and Sale agreement. 

It sounds like you are inexperienced in foreclosures and possibly probate.  Being in Maryland, you should definitely contact a real estate attorney to discuss this and get the correct legal document.  It may cost a few hundred dollars but it should not be a long meeting.

There are some states where an HOA lien is a "Super Lien" status, meaning it takes priority over any mortgage/note. It is public policy in those states that an HOA has an obligation to maintain the property for the good of the community. My state an HOA lien does not take priority.

But, buying an HOA lien is just like buying a 2nd mortgage lien/note. You still have the obligation to make payments on the first

The problem with marketing to attorneys is that their legal liability to their clients is to provide the best advice that will gain the client the most money. That almost always means they have a few realtors that they refer clients to who have a house for sale to obtain the FMV (based on the house condition.) No malpractice suit will be successful if the lawyer shows that he/she referred their client to a licensed realtor.

I'm very surprised that you found two lawyers who were willing to take that liability risk.  Every attorney (probate) that I have contacted gave me the same explanation.  I gave up on attorneys and now focus on the Personal Representative or direct marketing to divorcees.

Very bad idea.  I don't know the law in Alaska, but in California buying a house in foreclosure and renting back to the homeowner is illegal.  If it is done, courts have held that the new buyer no longer owns the house but is actually a lender.  The rental payments are recast as note payments. So ownership of the house reverts to the original owner.

Even if that is not the case in Alaska, remember the homeowner could not or would not pay the original note so why would you believe they will pay the rent?  Two of the main criteria for granting credit (of any kind) is capacity (do they make enough money to pay the debt) and character (do they have the ethics and morality to pay a debt?)

This is an issue to discuss with a real estate attorney in your state.

The accepted direct mail standard is that the more times you mail to each recipient the higher the response rate.  Most direct mail teachers I've studied say a minimum of 6 touches up to 11 are needed to be effective.  Very few investors do this.  This is why direct mail is expensive.  Response rate is not the goal, conversion rate is.  People will often call the person whose letter they have consistently seen. 

Something to put at the end of the letter is "If you're not ready to sell now, please save this letter and call me if your situation changes."  It's surprising how many people will actually save the letter.  Also, combine the letters with a phone call to the homeowner a couple of days after the mailing - "Just calling to see if your received my letter."  But keep mailing.

IMO do not use a yellow letter.  Their time is long past.  Just too many investors sending them.  I had one homeowner show me 57 yellow letters he had received, all saying virtually the same thing.  Which would you rather receive, a form letter (which is what a yellow letter is) or a personalized letter.

I agree that the best success is to focus on one or two niches, and sub categories in those.