Minnesota Real Estate Investors Association, Inc.

It has been a couple of months since I have been able to post anything on the blog. I have been rather busy lately as we have made a lot of changes around the office, and I was working on a new project that I finished just before the holidays. Hopefully I will be able to post more frequently now that things are starting to settle down a little bit again.

In December at out Monthly MnREIA Meeting, we had a great panel of REO agents. And we had one of our largest attendances in a long time, we usually have between 125-160 people at all our meetings, but December brought in 181 for the REO Panel. If you missed the meeting, the audio archive is available for MnREIA Members at www.MnREIA.com/Events.aspx?ID=REO-Agents-Panel-10-12-7-2010.

The biggest project I have been working on though is a Rehab Estimate Worksheet. The worksheet is designed to allow anyone, regardless of your level of experience to easily and quickly determine the estimated cost of a rehab for a property. First you have to setup some default costs/factors, which will be easy enough to determine the defaults, because it shows you the state/local and national averages, and with one click of a button, you can set your defaults to either the local or national average defaults. You can then come back and adjust each individual item as time goes on and you get a better feel for your own individual costs/factors. 
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You’ve heard about SEO, but have you heard about Local SEO?  It’s not your fault if you haven’t, but if you don’t take this moment to begin building your knowledge of Local SEO you will only have yourself to blame.  This is where your attention should be if reason #1 has any meaning to you whatsoever... this is what you need.

#1 - LOCAL SEO IS THE REAL ESTATE INVESTOR'S DIRECT PATH TO THE FRONT PAGE OF GOOGLE!

Over the past year you may have noticed that a peculiar little box providing a map and local results are popping up more and more for real estate related terms.  It is most commonly referred to as “The 10-Box” and as you have probably noticed… this “10-Box” displays local results prominently on the first page of Google’s search results!

Below is an example of the first page of search results where we can identify 3 distinct areas when doing a search for the term “home buyers.” 

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The new headlines catch phase is “Robo Signer”. These robo signers have been signing foreclosure documents at a rate of up to 1 document per minute. That’s 5,000 – 10,000 per month. Everyone knows that it is not physically possible for these robo signers to have read every document. That is the reason everyone is calling for a moratorium on foreclosures. Or is it?

If everyone was upset with the fact that these robo signers were not reading all the documents, then why wasn’t everyone upset that congress has passed health care and over a trillion dollars in stimulus programs while all along admitting that no one could possible read all of it before voting on it. So ask yourself, are they really upset that the robo signers didn’t read the documents. If you are honest with yourself, then the answer would have to be no.

So what is the real reason everyone wants a moratorium on foreclosures. Politics… In 3 weeks there is a major midterm election and this could be one of the most historic elections in our country. The politicians on both sides of the isle are looking for something to blame and point fingers at to make themselves look like they care and that all our problems are the banks. 
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Over the last few years we’ve been predicting records were going to be broken for years to come and that it would be a uniquely incredible environment for real estate investors. Today RealtyTrac issued a press release for the month of August that illustrates the fulfillment of this prediction in no uncertain terms.

Here are the key numbers to note:

• In August, 1 in 381 housing units received a foreclosure filing.
• RealtyTrac has seen 1.2 million repossessions so far in 2010.
• Before the housing bubble burst, in 2005 only 100,000 houses became REO’s.
• 95,364 property foreclosures in August, a historic record.
• An increase of 25% since the start of the 2010.
• In August, 96,469 homeowners receive a notice of default.
• 1% decline in the number of NOD’s filed in July.
• A 30% decline since August 2009 after a peak of 142,064 NOD’s issued in April 2009.

For a complete list of notable numbers you’ll find them all just above the comment section. Our initial prediction was that with the drastic turn in the economy. This would create a flood of opportunity for real estate investors based on the sheer volume of properties vulnerable to a declining economy. 
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I know you have heard about Land Trusts and you know that you should be using them. But I know you and you haven’t gotten around to using them yet. You believe that Land Trusts are too complicated and you just haven’t had time to learn and completely understand them, but you will get around to it one of these days.

Trusts have been around for centuries and there are tools that the rich use regularly to protect their assets. Land Trusts are a very special type of Trust that was created to protect your real estate investments, whether you are a landlord who holds real estate for the long term or a wholesaler flipper who only owns the property for 5 minutes.

There are several reasons why people use Land Trusts, but the most important one to me is the Privacy. No one knows what I currently own or what I have owned in the past and that is comforting to me to know that no one will ever be able to find all my assets if they get the bug to sue me for any frivolous reasons. 
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Let me start out by saying that I generally try and stay away from political comments. I prefer to stay on topic and discuss the facts, but this time I have no choice but to comment on politics. This latest round of political games has my blood boiling and I can’t hold back any longer.

Congress just passed another $1 billion dollar emergency homeowners relief fund. You can read all about it on MarketWatch, here is the link: www.marketwatch.com.

Were shall I start?

I guess I will start out with the phrase “emergency homeowners relief”. Emergency, really??? The emergency was almost two years ago when they pasted the TARP funds to help, if you remember, homeowners and bail out the banks and financial institutions, but once the TARP funds were approved by congress, they decided it would be better to just buy stocks in the companies they chose to keep solvent. It didn’t seem to be that much of an emergency to congress in 2008, otherwise they would have spent that money on what they told us was the reason in the first place to pass the TARP funds. I think the only reason it is an emergency right now, is because the midterm elections are in 4 months.

So now that we understand the congressional definition of an “Emergency” we can then start to talk about the facts. They are as follows:  
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Real Estate Investing requires us to maintain a buyers list, seller leads, and other various prospects. Now that more investors are using the internet for real estate marketing investors need a way to maintain those lists in efficiently and effectively. This is where Auto Responders come into play...

When you are taking your real estate marketing online you will ultimately be obtaining emails that need to be catered to in certain ways. In fact, there are two major elements to any auto responder: On the one hand you have the auto responder itself which is a program that sends out a series of emails to a lead. This works particularly well for following up with seller leads leads because the actual content doesn't require any updating. On the other hand we have the broadcaster which sends out one single email blast to a list. This comes in particularly handy with buyers and investors that you will be updating with the most current content.

Finding quality information on using auto responders can be a daunting task. So what we have to together in this post is a list of recommended readings the will give you a great foundation for learning how to use auto responders.

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It probably won’t work for you if you still think that it won’t. I used to think that for a few years because I wasted a lot of money on direct mail marketing a few years ago, so I stopped direct mail and migrated to online advertising and that worked for a while. But the pendulum has swung back again and I am now getting some good results from direct mail marketing again.

My response rates are still low, but the responses I am getting are better quality leads than I have been receiving from online advertising and fishing through the MLS. I started a couple marketing campaign s a couple of months ago, with little to no results. But I just started hitting the same list a second time and in the past week, I have received 4 good leads. One I have an offer in on a free and clear property, one the seller is still stuck in fantasy land and the other has two rental properties that need short sales, but the numbers look good enough to try them. 
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In the 11th inning, the House of Representatives finally passed the closing date extension to September 30th for the first time homebuyer’s $8,000 tax credit. This is good news as an expected 180,000 transaction that were successfully signed and finalized by the April 30th deadline that supposed to close by June 30th, didn’t close.

There are many reasons why these transactions are taking so long, but the primary reason is because the most of those transactions are short sales and getting to the closing table with short sales can be a headache to say the least. But now they have an additional 90 days to rap them up and close by September 30th. 
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Many Real Estate Investors start out rehabbing properties to resell for a profit. Many of these investors eventually migrate to wholesaling or become landlords, but some become experts and just keep on rehabbing. Most rehabbers build a system and once they have it fine tuned, don’t deviate from that system. If they build a system rehabbing rental properties for landlords or for first time home buyers, then that is what they always do, because it works for them.

However, a few rehabbers make the leap from rehabbing properties in low to middle income neighborhoods to rehabbing properties in upper middle class to affluent neighborhoods. But very few move beyond that and take the step to rehabbing extremely expensive houses. And even fewer are true visionaries.

A close friend of mine, which many of you already know, Robyn Thompson, the Queen of Rehabs started out rehabbing multi-families in firs time home buyer neighborhoods in Connecticut. She then took a huge leap in faith in herself and her abilities and now rehabs multi-million dollar mansions in Florida. That is something that I hear a lot of people say is too big of a rehab, and to those people I say, you are just not thinking big enough. 
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