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It looks as though creative ideas are finally coming back to the marketplace, and it is certainly much better to comment about some of those instead of the negative statistics being needlessly generated from within the real estate community.
I was glad to see a story about a family in Memphis taking matters into their own hands. As many of you know Memphis has been among the most suffering of real estate markets over the past couple of years. This story is about a family man wishing to purchase a house to live in via an auction and getting a good deal. But he doesn’t need to move, so he would only take a good enough deal or not buy. He realizes it is a buyers’ market.
Why doesn’t he need to buy? Because he already has a house for his family and is meeting the mortgage payments. But he sees the value of buying while the getting is good, which pumps more into the economy and he sees how it would put him in the position of strength.
That is because he knows that he would be able to rent out his current home. There are a ton of people out there who can no longer qualify for a mortgage due to credit problems even though they could likely afford one. This should leave him enough flexibility to rent out his current home for the amount of, or perhaps a slight increase over, his current mortgage.
By doing so, and by purchasing another home to move into at a bargain price, this man will have lowered his monthly mortgage payment, significantly increase his net work (by owning 2 homes), and set himself up nicely for the future. Once the market bounces back, he could potentially make a very nice profit on the home he purchased at a bargain.
He could also offer a “rent to buy” option for the original home and begin the road to a profit ahead of schedule. Based on the scenario I describe above, being able to offer a “rent to buy” could be more beneficial. A rent to buy tenant will take much better care of the home compared with a 6-month or 1 year lease tenant.
This is exactly the type of story we should be seeing a lot more often than it seems like we are.
Here is the link, if you’d like to see for yourself:http://www.myeyewitnessnews.com/news/local/story/Foreclosed-Homes-Go-Up-For-Auction-In-Memphis-Area/rPi1Vx9-jEiVsVN4bQFkMA.cspx
From the industry side comes another version of an idea that for some reason hasn’t taken off yet. People don’t go shopping for real estate by going to the local realty office. Yet, very few realty offices are in high foot traffic locations. I like what CondoOutlet is doing in the St. Johns Town Center in the Jacksonville Florida area.
They have opened a 10,000 square foot real estate showroom with 2 “life sized” condo models. This is in a major shopping center. (This company is not a client, by the way.) While I am not here to promote a single realty company, I mention this because I applaud their strategy.
Over the years, I have been in literally hundreds of real estate agency offices. But maybe 2 or 3 of them in a location with any degree of significant “walk-in” possibility. With the price of gas being what it is and has been, and open houses seemingly always around the same times, this opportunity to be convenient to the public should not be overlooked any longer. That is, to reach the public that hasn’t already found a way to benefit by the current real estate market!
It is a part of just about every day for me to read up about some local real estate markets and get the good, the bad, and the ugly. Mostly, as you can tell by several of my comments over the past few months, I get frustrated at the realty associations pushing out negative statistics while they are supposed to be promoting activity in the market.Finally, I have found an article that is indicative of what we SHOULD be seeing when it comes to local news real estate reports. It shows me that the reports about how sales have dropped in whatever city compared with last year are spreading negativity, and to a point that the market isn't pie-in-the-sky either.http://www.coloradoan.com/article/20090421/UPDATES03/90421021/1002/rss That is the link to an article by a reporter in Ft. Collins, Colorado. It discusses realty agents, buyers, and sellers seeing differences in supply and demand within a few miles of each other. Ft. Collins is not exactly a 'major league' city in terms of size. Yet, a town of this comparably small size is experiencing fluctuation on the local market.This story represents solid reporting. Even in the era of homes selling before they hit the local MLS, it was location, location, location that made the difference. A few red hot zip codes could reflect desirability and activity over an entire big city.My point is that if a community the size of Ft. Collins has this much variation in terms of hot and cold buyers and sellers, there are probably thousands of stories along the same lines in the top 50 largest cities around the country.I wish every realty agent and especially realty association board members and staffers would take note of the above linked story and do some serious digging into the "pockets" in their territory and farm areas.Let's be able to compare the supply and demand against what is going on right now in other parts of the community - and not making it sound negative by comparing against last year's statistics.Serious potential buyers, for whatever reason, were likely not looking to buy a year earlier. They probably don't care about home sales statistics from 12 months ago when they are looking now. What they do or would care about is which nearby neighborhood has the best value for them right now. Local housing information can be used to spur the local real estate market.
I was having one of those “If only I had…..” moments this morning when catching up on real estate related news. For as much time as I spend feeling like a preacher when talking to current and potential clients about ways to make the current real estate market advantegous, as well as friends and family, I could have been a contender myself.
Looks like it is time to circle back to an idea presented to me just over 20 years ago that didn’t materialize at the time. Maybe this will get you to think about this as well. This will not sound like a real estate marketing idea but stick with me.
Years ago when I had more time to devote to it, I was in a fantasy sports league with a group of 11 other guys aged between 25 and 40. That was back when I would constantly have to explain what a fantasy league is and does. About half of the group had gotten together for lunch one day when one of the guys said he heard about some land nearby that was about to be put up for sale. He went on to wonder to the group about what could happen if 10 of us would each put up $5,000. That would give us $50,000 as a down payment on a million dollar commercial property.
This happened to be around the time I was starting to get involved with a client looking to market a technology feature to real estate offices. (This turned out to be the springboard for what I have been doing ever since!) I thought that was an interesting idea, especially since someone I knew was making his living from managing family owned commercial properties and he had plenty of time to travel and enjoy his life.
As it goes with a group of casual acquaintances, the “group of friends” idea didn’t make it past a first meeting. Even though I have thought about it from time to time, it is a challenge to find enough people trustworthy enough to do this, let alone enough that would have a few thousand dollars to do this.
Personally, one of my investments is in a real estate syndication, but I don’t have any hands-on involvement even though I have seen a small profit in the past couple years. But now I’m kicking myself for not pursuing that sort of thing over 20 years ago, and then looking to move up the ladder. That’s how success in real estate starts. Do something like that and then buy out others in the group, or use the partnership success as a springboard.
Now I fast forward to today. This is totally pie-in-the-sky, but the story from Boston about Normandy Real Estate Partners buying the John Hancock Tower in Boston for $660.6 million dollars. Not that I would have been in a partnership with that much in capital. It’s more what they accomplished than the amount.
Upon further review, it turns out that the John Hancock Tower was about to go into foreclosure, and the property was being auctioned to attempt to prevent that foreclosure. Since much of my time now is being spent looking for single family homes and investment properties to go to auction, it shows the tremendous opportunities that real estate auctions are bringing.
In case you weren’t aware (and I wouldn’t expect anyone to know this off hand!), the Hancock Tower in Boston was sold to the ownership group that avoided foreclosure as recently as 2006. Less than 3 years ago the (now) previous owners bought it. For $1.3 billion dollars. To translate, this real estate partnership bought one of the most significant properties in a major city and “saved” more than a half-billion dollars.
To put it mildly, there’s no way I can kick myself for missing out on that deal. It’s not like I could have written a check and bid a few hundred thousand more for it.
The point is that it got me to think that there must be some lesser scale Hancock Towers out there, if only I and a group of others could be ready when they are found. Those of you with some money to invest might want to think about others you know in the same position and the power of group resources. And those of you in the real estate community might want to think creatively as well. What’s that saying? It’s not what you know, it is WHO you know.”
As much as everyone else, I got a chuckle out of the story from Cincinnati about somebody finding the online promotional code for a free pizza from Domino's and spreading the word to the point where local Domino's wound up giving away more than 600 pizzas in less than one day.But if you are a realty agent or a mortgage broker/lender, my suggestion is to stop chuckling and start taking action when you hear about something like that in time. In this instance, a Domino's official supposedly got wind of this "not supposed to have been used" code being discovered and they were able to pull it after a few costly hours.If I were a realty agent and found out about this, I would send out an e-mail to my client base ASAP to alert them to the possibility of a free pizza and which site to go to before it is too late.Why, you ask?Think about it. It is really all about marketing. Chances are a percentage of the people you send it to will e-mail you back or call you to thank you for letting them know, and/or to ask how you found out. I am here to tell you that is some valuable information, and it is exclusive to you.Suppose even one or two people find out in time and GET a free pizza. It is because of you and they will thank you. More importantly, you know that they frequently monitor incoming e-mail and are prepared to act. Think about that when you SELL or even book your next listing. Chances are you will get some "thanks anyway!" responses over the next 24 to 48 hours. Let's say your "immediate client list" has 50 e-mail addresses on it.Even if your result is, say, 20 (and that's less than half) people responding in some form to your helpful "alert" within a couple of days, you now have a personal and exclusive list of 20 people who will open e-mails from you. Keep that in mind when you have a listing that is hours away from hitting the MLS and being seen online. That is why you ask!If you are a mortgage broker/lender, having a similar list of people who will definitely check your e-mails can be very handy when rates next take a dip, which seems to be every week of late.Heck - an agent or lender could offer to take the family out for pizza to review their current situation against the other financial opportunities out there. Every business day I contact and consult with realty agents and mortgage brokers/lenders looking for low cost ways to attract immediate business. It can be done, whether with cheese or sausage.