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The Investment World In Your Market
By Joel S. Pate
In the last article, we discuss a strategy of finding new customers to purchase investment properties and a way to get into the office of real estate agents that you want to do business with.
In this week's article, let's discuss the investment world in your market. In every market in this country, men and women are buying and selling investment properties. Attached to every purchase is a mortgage.
Usually these borrowers have decent credit, want to put little or no money down, and are looking to enter into relationships with mortgage professionals that they can count on, actually, to become a part of their team.
That's right, a part of the team. That's where you want to be. On the team.
How do you identify these investors? Well it's easy. The first place to start is the rental section of the classified ads. They are all there. Circle the ads of the price range home that you want to work. Let's stop right there. It is very difficult to close a One Time Close Construction Perm under $75,000. So, you want to concentrate on properties, investors, and areas of town in the price range that you can make more money. Do something on purpose.
Getting back to the strategy, uncover the phone numbers of investors that own property that are running rental ads. Using the Internet, you can run a reverse lookup on the phone number or you can just call information. Once you determine the name of the owner, go online to your county probate office. Run a look up on that owner's name.
This may take a little practice. But, once you have the steps, you will be able to quickly determine a number of very important tidbits of information:
1. How many homes does this investor own
2. How often does he buy and sell
3. Which lender does he utilize
This information is important as you begin the process of identifying the investors that you want to work with. Why? Because you can not help everyone. Some investors have terrible credit and are relying upon subprime loans to purchase property. Since most properties that need a rehab loan need money to improve the property, and almost every one of those loans require a borrower with at least a 640 FICO score, you should eliminate any investor from your efforts as fast as possible that would not qualify for the loans you currently have.
My friend Brian Sacks would say it this way: Determine what you want to do, become an expert at doing it, hold yourself out as an expert of that specific market, and you will have more people come to you, for that area of expertise, than you need.
This reminds me of a personal story: When I was just getting started in the business, I purchased five and 10 acre tracts of land, subdivided them and sold the lots on vendor lien deeds and then sold the paper at a discount to investors. Well, the point of the story is that I would advertise the property I had for sale.
Nearly every day, someone would call on the ad only to say, "Well I you just had a lot in X area of town, I would purchase it." Well me being young and naive, I would spend the time it took to look into that market. After hours and hours of driving and searching, many times, I would find a piece of property.
Boy was I excited that I possessed the skill and determination to uncover the perfect property, for that "buyer." Well, I know you are ahead of me already. I would call the prospect to report my good news. Only to have them tell me that they were no longer interested. That is, of course, if they had the guts to answer my call or call me back.
I continue to be amazed at loan originators that have been in the business for more than twelve months that continue to chase prospects around. I can't believe the number of originators that report to me after spending my time and theirs on a scenario, "Well, they wouldn't call me back."
What exactly are your criteria for selecting who you will work with and what you will work on?
Well, as you can tell, I believe that it is past time for you to concentrate on a particular niche in the market and become an expert yourself. Hold yourself out as the expert by doing a great job and then, when you tell your community in the proper manner that you are an expert at a specific niche market, or better yet, when other people in your community report that you are an expert at a specific niche, you will not be chasing deals any more. You will be turning away deals that do not meet your criteria or your area of expertise.
But, don't worry, the business that derives from you being an expert will be better business, it will not be as price sensitive, and you will no longer need to attempt to work with people that will not return your phone calls.
To find out more about the exciting niche market of One Time Close Construction Permanent lending for new construction and rehabs, feel free to contact me by visiting www.vadiumgroup.com/cpexpert.php.
Dedicated to coaching you to CP loan success!
Joel S. Pate
Joel S. Pate, a dedicated entrepreneur, has spent more than two decades in the building, mortgage, and real estate industries and has been involved in over $100 million in construction loans and over $1.3 billion of residential lending. As the CP LOAN EXPERT columnist, Mr. Pate provides straightforward, unbiased advice about every aspect of construction permanent lending. This week's article: "THE INVESTMENT WORLD IN YOUR MARKET" is the sixth installment of Joel's unique training with simple strategies and tactics designed to teach you how to become the CP loan expert in your market. If you ever wanted to unravel the mystery surrounding new construction lending, then you should tune in.
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