Mark has finally started his marketing campaign geared towards preforeclosure homeowners. It is the first week that his marketing campaign has taken effect and he has mailed out about 500 letters to his Mailing list. Based off his first week efforts, Mark got one call on his cell phone from a angry Seller. The seller yelled at Mark exclaiming that he was not in foreclosure and this was a mistake. Mark feels frustrated about the lack of response.

TIP: Marketing is a continuous effort and the typical response rate on a mailing is 1-2% on the number of mailings sent out.

Mark however continues his mailing to the list 500 pieces at a time. While his mailing campaign continues, Mark continues his job from 9 to 5 everyday in his as an IT analyst. By the 4^th week of the mailing campaign, Mark’s cell phone starts to ring with calls from distressed sellers at all hours of the day. Herein Mark’s begins to realize a fundamental truth in the Real Estate Business that an investor needs to be available on his phone at the moment a seller reaches out to him or her. The likelihood for capturing the deal at the moment the calls comes in is much higher than if he or she tries to return a phone call by the evening hours.  Mark is continuing his corporate job but is trying to find his balance with his new business (yes that’s right Mark is trying to run a real estate business which involves marketing, deal sourcing and prospecting, accounting and management). As soon as Mark finishes his corporate job, he calls back his leads and work on putting together mailing pieces for the upcoming week’s mail out.

Mark has finally locked in a homeowner for an appointment for a Property located in Garfield, NJ. Mark setups the appointment to go speak with the seller about his situation and what Mark can do to help workout a solution for the seller’s situation.

TIP: In the residential preforeclosure business, a Real Estate Investor is more like a counselor as it is his or her job to facilitate a solution for the seller problem and satisfying the bank. For this role, the real estate investor gets handsomely rewarded.

As Mark speaks with the homeowner over the phone, he gathers a few pieces of information so that he is better prepared. He asks the list of following questions: (Keep it as a guide)

1.    How long have you owned this property?

2.   When did you buy this property?

3.   Is there a second mortgage on the property?

4.   How much do you owe the bank for each mortgage?

5.   How far behind are you on each mortgage?

6.   What is your monthly payment for the first mortgage and for the second mortgage?

7.   What do you think your house is worth in today’s market once it is all fixed up?

8.   How much repairs do you think the property needs?

By asking these questions, Mark or any investor will be ascertain to whether this preforeclosure deal falls into one of these categories: short sale, loan modification, equity deal, redemption deal, or second short pay deal. Mark goes ahead and starts contacting a few Realtor who work in Garfield to help him run a Comparative Market Analysis on the property to get an idea of the after repaired market value of the property. Why woul a realtor give this information to Mark because Mark tells them that he is a Investor and will give them the listing at the time of resale if they help provide him an accurate comparative market analysis.

TIP: Realtors are willing to work with Investors and want to develop a relationship with them but make sure you give them the incentive of the listing if you are going to acquire their help and make sure you keep up your word as real estate is a small community and word gets around quickly.

TIP: Try to work with Realtors who are located in the area where the subject property is located. This will ensure that the analysis they give you the actually have some knowledge of the market area.

To learn about Mark’s first seller meeting, and how he can structure the deal to make it a win-win for everyone in the deal. Tune in next week to find out more.

MARKS NET WORTH as of July 8^th , 2009:  $74,500

Equity in home: $60,000

Savings: $2,500

401K: $12,000

Written by Ankit Duggal

Investment Director: www.rernj.com

RER is a boutique real estate investment company based in Clifton, NJ