Let the Business Teach Youadmin
When I first got into real estate, I chose to start with pre-foreclosures. I learned that banks and lending institutions would auction houses off to the highest bidder at the courthouse steps in the county where the property was located. I also learned that you could buy these houses directly from the homeowner before the auction date, and thus help the homeowner have dignity, recoup some of their equity and keep a foreclosure off their credit report. Due to the fact that these homes usually need repairs and were less than perfect, I figured I could buy these properties at a discount and create a win-win solution for the owner. I attended my local REIA meetings to learn various techniques to finance the purchase. This all sounded great to me so I obtained a copy of the local legal notices to get a list of all the foreclosures in my area.
Next, I would send a letter to all the homeowners listed in the paper asking if they would be interested in selling their house before the auction date. I soon found out that because foreclosures are public, a homeowner in foreclosure receives many letters from folks that want to buy their homes. So, I decided to become a door knocker and visit them in person and ask them directly, face to face, if they would like to sell. I was able to have success but soon found out that this is a numbers game. Interestingly, I discovered that many of these homeowners didn’t want to sell but were just looking for solutions that would allow them to keep their homes. It worked out that I would have to knock on ten doors to find one owner that wanted to sell. Accepting that fact, I continued knocking until I got past all the no’s until I found a yes.
There were many times I would knock on a door and a homeowner would say they don’t need to sell because they were going to file for bankruptcy protection. If they file bankruptcy, that will instantly stop the house from going to auction. A typical homeowner also gets letters from law firms explaining that if they file, it will stop the foreclosure. If a homeowner chose to file bankruptcy, I would simply mark them off my list. However, since I always attended foreclosure auctions and I would later see some of those very houses get auctioned off and recalled talking to those very owners three months prior. I soon discovered that a home can still go to auction even if the owner filed bankruptcy. This meant that those owners now have a foreclosure and a bankruptcy on their credit and they still lost their home. I didn’t understand how this could happen, but it certainly taught me that I needed to learn about bankruptcy. I went to my local REIA meeting and requested that they get a bankruptcy expert to teach us about how it works and why some owners still lose their homes. I learned everything there is to know about the subject and it has helped tremendously. Therefore, the business will teach you what you need to learn.
As I continued to talk to homeowners in foreclosure and write offers, I would ask the owners if they had any other liens besides the mortgage. Usually they would say they didn’t know. I would hire an attorney to do a title search and they would usually charge me a couple hundred dollars. Then a few days later they would inform me that the house has Federal tax liens, hospital liens, mechanics Liens, and judgements that made it impossible to buy the house. But, I still had to pay the two hundred bucks for a house that I didn’t buy. The business was teaching me that I needed to learn how to do my own title search before making offers. Guess what I did next? I went to my local REIA and they did not know anyone that teaches it. So, I went to the courthouse and learned how to do it. It took some time but it has saved me thousands and thousands of dollars as well as a lot of precious time. When I get ask to be a presenter at REIA meetings, I always teach how to perform a title search. In many states, it can even be done without going to the courthouse.
Another aspect the business has taught me as I go deal hunting, is that there are thousands of vacant houses in our great nation. I used to have trouble finding the owners of these treasures. The business taught me that I needed to learn how to find vacated owners. Thanks to modern technology, I learned how to find them and it has greatly increased my success rate. These are just a few examples of how to “let the business teach you”. I could write a book on the hundreds of things the business has taught me simply because I got out there and took action. Oh wait, I already did.