Conference Call Recap 1/15/09

I'll try and recap what we discussed last week. This is from my cluttered memory, so please add things I have forgotten.

When to List Property as Seller/Owner
We had some discussion about when and how to switch an existing listing on the MLS over to your name as the seller/owner. I think we all agreed that after the BPO was completed (possibly even when your offer is countered) was the ideal time to switch the listing over to your name. You do this by having the existing listing agent withdraw the MLS listing and then relist it with your name as the seller/owner.

When to List on MLS
This is a balancing act that must be evaluated on a house-by-house basis. The key is having a very good idea on the 30-day quicksale value of the house. If you know this, you know what price to list the property at. Why list the property at this price? Because you want offers flowing in the second you list it to capitalize on the "newness" and excitement when a house first gets listed.

Nathan J. (aka The Short Sale Kid) insists that you should list it on the MLS quickly to best gage the market value of the house and give it as much time as possible to get offers. You then simply counter and manage any offers that are submitted using a weeding out process to ensure the buyers will "stick" (more on this in another post). The challenge in listing the property so early that your listing gets stale while you're negotiating 2-3 months or longer. This is the balancing act you must walk based on the marketability of the property and your comfort level in the 30-day quicksale price.

Seasoning Issues
It still doesn't look like anyone's figured out seasoning problems for FHA (or VA) loans. One strategy is just to move out of the way and make a little money by completing the A-to-C transaction. Another way (pushed by Jason Medley & Nathan J.) is to refer these buyers to bankers who don't have seasoning issues. Jason & Nathan stipulate on thier listing that any potential buyer must prequalify with their bankers. This gives them a backup plan in case the buyer's lender (FHA or otherwise) has a seasoning issue.

How do you find these buyers? Refer to one of my earlier posts where I pasted Jason Medley's video on this very subject.

Turning Over New Rocks
We as investors are always looking for new ways to find homeowners in distress. One of the new ways discussed was to work with short sale brokerages. Who knew there were brokerages out there that only do short sales.....and close a very high rate of them. We, as investors, need to make friends with these realtors and capitalize on all the marketing dollars these firms are spending to get distressed homeowners to call.

Elevator Speech to Realtors
We talked about some ways to get realtors on board with what we're trying to do. Personally, I've had luck lately by positioning things something like the following...
--You can either be a realtor that lists short sales and then tries to find an end buyer OR you could be a realtor who brings an investor to the table from Day-1 to get the deal closed quickly. Which is more powerful?

The Magic Folder
We talked about the "magic folder" I give to the lender's BPO agent and some other content ideas that may be helpful to include. I've now given this to three BPO agents and believe it's been extremely successful in getting the BPO to come out low. Look back a few posts on the blog to see what is included in this folder and how to deliver it.

What to Do with Ugly Properties
Dave brought up the question regarding what to do with properties needing to be rehabbed that an end-buyer's lender won't finance. In this environment, most lenders don't want to risk taking back an unmarketable property into their portfolio. Dave threw out the idea of finding investors to finance your purchase and rehab costs (therefore not a quick-turn). Because you're buying the property so far below market value, the loan-to-value should be low enough to attract the attention and meet the requirements of investors.

That's all I can remember right now, we'll have someone take notes next time. Too much good stuff not to record.