You’ll be surprised who your customers are!
By Lou Castillo — As real estate investors we are taught to locate motivated sellers and buy their property well below market value. As wholesalers we are taught to sell these great deals to investors. But what happens when the market changes?
With the glut of houses on the market we are seeing house values fall and home owners often do not have much equity in their property, especially if they only bought their house a few years ago. As credit criteria tighten the largest population of potential buyers is made up of those that do not qualify for financing.
As a successful entrepreneur, you want to look at the changing environment and not get stuck with conventional wisdom and strategies, but rather adapt to the new market to capitalize on the opportunities. Yes, I said opportunities. Even though the changes seemed like they are profit crushing; they instead provide new opportunities not previously available – if you look for them!
On the one side we have not just motivated, but desperate sellers trapped in a beautiful house they can’t sell because they don’t have sufficient equity to the Realtor’s commission and closing costs for the buyer. Their agent makes them face the realization that the only way to sell is to bring money to the table…an option that is not only distasteful, but often unrealistic. These sellers soon discover that they are stuck with the property for a while. Imagine how desperate this must feel for a couple getting a divorce, or for someone needing to relocate for a job.
On the flip side is the tremendous volume of home owners who experienced the trauma of having their house foreclosed upon. Many were hard working families that never had a credit problem until a well meaning mortgage broker talked them into a loan that was easy to establish, but which quickly escalated beyond their means. These are not poor credit risk individuals, and even though they desperately want to own a home again, the blemish on their credit prohibits the dream.
There is another segment of the population that was dreaming of home ownership. They had worked hard, saved money, and suddenly discovered that the criteria had tightened so much they could not qualify for a loan.
Both of these groups represent the pent up demand for houses that is unfulfilled due to the lack of available financing in the marketplace. Therein lays the opportunity. Do you see it? A large group of home owners desperate to sell and an unfulfilled pent up demand for houses. All that is missing is the financing. A wholesaler can earn a fortune just by creating a financing mechanism.
The beauty is that it is already available. In fact, the underlying problem is that the home owners cannot get out from under their existing financing.
These are the perfect deals because everyone wins. The homeowner gets out from under their current house and mortgage payments; the buyer is able to OWN a home without having to go through a bank to qualify for a loan; and the wholesaler makes money for putting the deal together. Even the lender wins because the payments continue to be made timely.
Of course, there is always the danger when you do not buy a house and you start marketing this great deal, that someone may in fact go behind your back and deal directly with the seller – or – the Seller may decide to try and sell to someone else.
To stop this dead I have a simple form I file at the court house as soon as I have a signed deal. It’s a 1 page form that costs usually $10-$15 to file, but it prevents anyone from ever buying the house out from under me without my consent.
Is that powerful or what?
I want to offer this incredible powerful form – my iron clad deal protection – to you right now for no cost.
In the spirit of full disclosure let me tell you that when you request the form, you’ll also be taken to a short video which explains Wholesaling Pretty Houses in more detail so you can really understand what we’re doing.
You’ll also get on my subscriber list and receive a 7 part video series on Creating Your Own Real Estate Profits.