Ah, everything in life changes, doesn’t it? If we are fearful of change, and reject it, then we miss out on so many great opportunities.
Change is happening to our real estate business, as well. Years ago, Bill and I worked hard to buy properties before they hit the ‘steps’ at the foreclosure auction. We dealt face-to-face with homeowners in distress, and really worked our ‘deal-structuring’ muscles to find ways to purchase homes prior to the auction.
When the economy fell into the pit, we drastically cut back on the number of houses we bought. We were no longer sure of the values of houses in our area - heck, no one was. So we rolled with the changes and I began coordinating short sales for realtors. Short sales helped us stay in the business, while at the same time limited our risk in the quickly declining market. We also got heavy into Lonnie Deals (mobile homes without the dirt). I must say, the yield on those little wobbly-boxes has been incredible.
When the real estate market bottomed out, we knew it was time to jump back into buying properties at the foreclosure auction again. Prices were at an all-time low and nice, rehabbed houses were few and far between. So we rolled with the tide and again started rehabbing and reselling foreclosed homes.
Because it was so easy to buy properties at the auction, we quit working so hard to get face-to-face with distressed homeowners. We allowed the changing economy to dictate where we spent the majority of our time and focus.
But things are changing again. Tired of not making any money in the stock market, people are now placing their money with big investment companies who, promising big returns, are buying up properties as quickly as they can. These big investment companies have finally arrived in our little county and are outbidding us at the auction on a regular basis. They bid with other people’s money and don’t mind bidding more for a property than we – who live and work in the county-feel it’s worth. We simply can’t compete against stupid money.
So do we let change push us out of the business? Absolutely not! Because we have so many deal-structuring tools in our tool belt, the change is doing us good.
We’ve gone back to what we used to do – getting face-to-face with homeowners in distress. Talking with homeowners allows us to structure subject-to deals for long-term holds, or reinstate a homeowner’s loan and then rehab and resale it, therefore needing less up-front money than it takes to buy with all cash on the steps. Also, working pre-foreclosures allows us the opportunity to save a homeowner’s credit – a win-win for both.
So don’t let ‘change’ scare you. Just make sure you know how – and have the knowledge to–roll with it. And as to battling my grey hair, I am now a strawberry blonde.
Bill and Kim’s North Georgia Real Estate Investors Association meets on the second Thursday of each month, from 7 p.m. to 9 p.m., at the beautiful Hilton Garden Inn off Main Street in Cartersville.