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How to Use Pre-Foreclosure and Absentee Owner Lists to Boost Real Estate Investment Returns

Posted by Betsy Nevins on Dec 19, 2024 in Direct Mail Marketing | Comments Off on How to Use Pre-Foreclosure and Absentee Owner Lists to Boost Real Estate Investment Returns

When considering real estate investments, one may wonder if foreclosures are a viable option. While they can be profitable, delving into the pre-foreclosure market requires a high level of expertise and dedication that many may not anticipate. Although the potential for returns is significant, reaping the benefits from investing in foreclosures demands a substantial amount of effort.

Key Takeaways:

Investing in the foreclosure market can be highly profitable, but it requires dedication and effort.

Investors should develop clear strategies outlining their reasons for investing in properties, methods for acquisition, and plans for utilization or disposal. Thorough research is essential for success in this market, including an in-depth analysis of the local real estate market, individual properties, state and local regulations, and the overall economic climate.

Foreclosure investing is a significant financial endeavor that demands focus, diligence, and thorough research into local property, economic, and demographic trends. It necessitates the development of a strategic plan for acquiring properties and ultimately selling them for profit.

Engaging in pre-foreclosure investing is not for amateurs. It is akin to buying used cars at auction, where experienced dealers possess in-depth knowledge of various makes and models, common defects, and how to enhance value. These professionals take calculated risks, unlike individuals who attend auctions seeking discounted purchases without a comprehensive understanding of the investment or risk management strategies.

Many novice foreclosure buyers attend courthouse auctions with hopes of securing a bargain based on the price disparity from the property’s intrinsic value. However, relying solely on price differentials for investment income is a risky approach. Seasoned investors in the residential pre-foreclosure market recognize the importance of selecting properties strategically, focusing on locations poised for redevelopment or improvement, and possessing unique attributes that set them apart in the local market.

Developing a well-thought-out investment strategy is crucial for success in real estate, especially in the foreclosure market. This strategy should outline goals, methods for property acquisition, holding strategies, and exit plans. Understanding the circumstances leading to the pre-foreclosure, whether due to individual misfortune or broader market trends, is essential for making informed investment decisions.

Acquisition Strategies

Many investors have been trained to search through publications listing assets up for auction and then contact owners to express interest in purchasing the property before it goes to auction. While deals can certainly be found at auctions, exploring alternative methods to acquire distressed properties can significantly increase the likelihood of successfully closing a deal. It also presents an opportunity to thoroughly understand and analyze the property.

For instance, consider an investor who gains access to properties by leveraging their network in the market and expertise in residential lending to assist struggling homeowners in negotiating with their lenders. By resolving loan issues, the investor not only enhances their reputation with both the homeowners and lenders but also opens the door to potential referrals from others facing similar challenges. In cases where a resolution cannot be reached, the investor is positioned at the forefront to acquire the property due to the trust established with the owners. Armed with a deeper understanding of the property’s strengths and weaknesses, investors can make well-informed decisions on whether to proceed with the purchase.

Another effective strategy involves purchasing distressed loans at a discounted rate from lenders. Banks and other financial institutions typically prefer to avoid acquiring foreclosed properties. To prevent taking on real estate owned (REO) properties, these institutions often sell nonperforming loans at a substantial discount. Investors have more flexibility than lenders in renegotiating nonperforming loans, sometimes converting them into performing loans that yield higher returns due to the investor’s lower initial investment. After allowing the loans to mature, investors can choose to retain them or sell them at a premium once they have demonstrated consistent performance over time.

In the event that the loans cannot be resolved, the investor has the option to foreclose on the property and take the title without facing competition from other parties. However, this approach requires a larger capital investment compared to purchasing individual properties at auction. The key takeaway is that there are innovative methods to minimize competition when acquiring a nonperforming asset.

Ownership Strategies

Investors must also have a clear plan for what to do once they acquire the asset. Will the property be quickly resold, or will it be held onto until the market conditions are more favorable for a sale?

Property Flipping Using Pre Foreclosure Lists

Investors interested in purchasing foreclosed properties and reselling them shortly after acquisition should focus on enhancing the property. Effective strategies include adding bedrooms and bathrooms, renovating kitchens, and finishing basements or other unused spaces.

Since property transaction details are publicly available, some potential buyers may be hesitant to pay a premium for a property immediately following a pre-foreclosure sale, even if its price aligns with other properties in the area. Creating value through redevelopment can justify a higher resale price and reduce the risk of extended marketing periods. However, investors should be cautious not to over-improve the property to the extent that its price significantly exceeds neighboring properties.

It is unwise to invest in extensive improvements for a foreclosed home that would price it out of the market.

Property Holding Strategy

One effective strategy in real estate investment is to hold assets as rental properties until market conditions improve and property values increase. Investors must have a deep understanding of the rental market to ensure there is sufficient demand for rental space and that the property can generate enough rent to cover maintenance costs.

For those willing to take on the responsibilities of being a landlord, purchasing distressed properties at a discount and converting them into rental properties can lead to significant wealth accumulation. Securing attractive financing options, such as interest-only loans, along with the tax deductibility of mortgage interest, can help create cash flow while waiting for the right time to sell.

While residential real estate is less volatile than other asset classes, it often experiences long periods of low returns followed by spikes in value due to changes in demand. This underscores the importance of ongoing research and a holding-period strategy to estimate the timing of value increases and prepare for the eventual sale of the asset.

Exit Strategies

Failing to plan an exit strategy is a common mistake made by new investors. Many believe that investing in foreclosure properties is best when there is an abundance available. However, a surplus of homes for sale and foreclosure properties may indicate underlying issues such as job losses or infrastructure problems in the area, making it less desirable for potential buyers. It is crucial to consider these factors when developing an exit strategy for real estate investments.

The current trends in the real estate market are expected to have a positive impact on the supply of available homes for sale or pre-foreclosures, while simultaneously having a negative impact on demand. This means that selling a property may prove to be more challenging until market conditions improve.

One common mistake that investors often make is solely focusing on the pricing differential for profit, without considering the negative effects of carrying costs. These expenses can include mortgage payments, taxes, insurance, and maintenance during an extended marketing and sales period.

To mitigate excess carrying costs, one effective strategy is to set a deadline for selling a property and then gradually reduce the price until a buyer is found. It is preferable to sell at a minimal profit or break-even point rather than holding onto a property at a price that will result in prolonged marketing efforts and accumulating carrying costs that could lead to financial losses.

In conclusion, investing in nonperforming real estate assets as a means to build wealth is a viable strategy, but it is not a get-rich-quick scheme. Success in the foreclosure market requires diligent study of successful investors’ strategies and tactics, as well as establishing valuable market contacts to gain a competitive edge.

Ultimately, achieving success in real estate investing hinges on implementing smart, well-thought-out acquisition and exit strategies. By dedicating time and resources to understanding the local real estate market and leveraging various tactics, investors can position themselves ahead of the competition and increase their chances of success.

3 Top Mistakes Companies Make with Email Campaigns and How to Avoid Them

Posted by Betsy Nevins on Nov 19, 2024 in Direct Mail Marketing | Comments Off on 3 Top Mistakes Companies Make with Email Campaigns and How to Avoid Them

1. Neglecting Mobile Optimization in Campaign Design

In today’s digital landscape, more than half of all emails are opened on mobile devices. Failing to optimize emails for mobile can result in a subpar experience for subscribers. An email that is not optimized for mobile may cut off the subject line, leading to decreased open rates. Additionally, slow-loading images, incorrect rendering, or a confusing user experience can prompt readers to immediately delete the email.

Regardless of the type of campaign you are running, it is crucial to remember that at least half of your audience will be viewing your email on a mobile device. Neglecting mobile optimization can alienate a significant portion of your potential customer base, ultimately hindering the success of your campaign.

2. Overlooking Personalization

Email marketing is a powerful tool because it provides direct access to your target audience’s information. It is essential for marketers to leverage this data effectively. Many email marketers make the mistake of sending generic email blasts to all subscribers when they could be personalizing their messages. Personalized emails can capture the attention of subscribers, foster brand loyalty, and set your business apart from competitors.

Explore opportunities to send personalized emails that make customers feel valued and unique, rather than just another name on a list. Additionally, consider segmenting your email list based on specific demographics to tailor campaigns to the preferences of different subscriber groups. While not every email needs to be individually customized, incorporating some level of personalization can significantly improve open rates, click-through rates, and ultimately drive sales.

3. Failing to Plan

Imagine you are trying to navigate to a new destination in an unfamiliar city. Do you rely on your GPS for guidance, or do you simply trust your instincts and hope to stumble upon your destination? Chances are, you would opt for the former and plan ahead to ensure a smooth journey. The same principle applies to your email marketing strategy. Embarking on a campaign
without a well-thought-out plan is a costly mistake that can waste both time and money.

One of the pitfalls of not having a plan is haphazardly sending out campaign emails whenever the mood strikes. This can result in poor scheduling, leading to an excessive number of emails being sent in a short period or, conversely, not enough emails being sent. (It is generally recommended to reach out to subscribers at least twice a month.) Without a solid plan, it becomes challenging to craft tailored emails for each segment of your email list. Consequently, you risk sending generic emails that fail to resonate with recipients, resulting in higher unsubscribe rates and diminished engagement.

To ensure that your email lists and databases are accurate and up to date, get in touch with us today to learn how our email appending services. Clean and accurate customer data can help you reach your email campaign goals.

The Importance of Segmenting Your Target Audience According to Lifestyle

Posted by Livetournetwork on Dec 28, 2018 in Data Segmentation | 0 comments

There are many ways to segment your target audience. Age and income level are just a few of those ways. Segmenting your target audience helps to address the needs and wants of specific individuals and increases the chances that your marketing efforts will be successful.

When you recognize the differences between particular audiences, you can better pinpoint your marketing message so that it appeals to the customers and prospects most likely to be interested in your products or service. Segmenting your target audience also helps you to stand out from competitors that rely on a more generic marketing message.

Generally speaking, segmenting your target audience usually falls into rather predictable patterns such as the ones listed above. If you really want to be successful in reaching qualified leads or you have a niche product or service that will appeal to a very specific audience, you might want to consider lifestyle segmentation.

Lifestyle segmentation breaks down information about potential customers into small subsets. Once you identify these consumers by lifestyle you are more likely to convert them into customers because you are offering something that appeals specifically to them. Another bonus of lifestyle segmentation is that once these individuals make a purchase they are very likely to become loyal customers.

While it can be difficult to segment prospects by lifestyle because of the wide range of options, there are four key aspects to consider:

1. Behavioral. Under what circumstances are your prospects likely to purchase a particular product?
2. Demographic. What is the age, gender, marital status and race of your prospects?
3. Geographic. Where will your potential customers likely buy or use your products?
4. Psychographic. How are these prospects unique in terms of personal preferences and lifestyle choices?

When it comes to lifestyle segmentation it is important to remember that this type of segmentation is more fluid than traditional segments. However, once a prospect has converted into a buyer, you should be able to take advantage of the long-term revenue and profits that the buyer represents.

You also should remember that the more your solutions enhance the quality of the life of a customer who was segmented by lifestyle, the more likely it will be that you can up- or cross-sell to that customer. These customers also are exceptionally likely to refer you to friends and family.

How to Market to Bankruptcy Leads

Posted by Livetournetwork on Mar 27, 2018 in Bankruptcy Leads | 0 comments

When it comes to the special finance market, there often is more than meets the eye. In other words, there is no one way sure-fire way to market to customers and prospects who are having credit problems.

Most experts agree that bankruptcies are the bread and butter of any company that is interested in the subprime lending market. This is especially true if you have the perfect mix of lenders, inventory and marketing methods.

In the past, those who had filed for bankruptcy would only be approved for financing after seven years but over time that period has continued to shrink, with some lenders willing to provide financing immediately after someone has filed for bankruptcy. Also disappearing are restrictions on the type of bankruptcies subprime lenders are willing to approve.

One important thing to keep in mind about the bankruptcy funding market is that it is anything but static. Each and every day new consumers come into the market. These individuals are knee-deep in financial difficulties. In many cases, after a period of time, they will have recovered from their financial difficulties, however, and are ready to move forward with more expensive purchases. For example, they will have gone from wanting the cheapest car to get them from home to work and back to purchasing a new car.

Working with these individuals over the long haul provides the opportunity to remain in contact with these them so that they will come to see you as more than just a subprime lender. Instead, they will see you as a partner, remembering that you were there for them when no one else was.

If you are looking to market to individuals who have filed for bankruptcy, here are some important things to keep in mind when approaching these prospects:

1. Be open and honest. Don’t use terms like pre-approved and pre-qualified haphazardly. Instead, offer them an invitation to apply.
2. Be sensitive. Don’t shame recipients or try to scare them into working with you. Many of these individuals are surprised to learn that they can obtain financing. Letting them know that you would like to help them will go a long way toward gaining their trust and their business.
3. Don’t generalize. Not everyone who has filed for bankruptcy has the same story. Don’t try to guess about their specific circumstances.
4. Always include a call-to-action. Don’t make a prospect guess how to contact you or what their next step should be. Instead, give them a toll-free number or direct them to a specific landing page on your website.

Obtaining an accurate bankruptcy list is an important first step when it comes to working with those who have filed for bankruptcy. How you handle the leads on this list, however, will make a huge difference when it comes to capitalizing on it.

The Ins and Outs of Email and Data Appends

Posted by Livetournetwork on Feb 26, 2018 in Data Append | 0 comments

If you are looking to obtain new email subscribers and improve the quality of existing ones, you should consider email append. And when used with your email marketing campaigns, data append can drastically improve your success rate. So, what is the difference between email and data append?

In the simplest terms, email append adds valid email addresses to contacts in your database. These contacts usually fall into one of the following categories:

1. Contacts with no email address
2. Contacts with old or outdated email addresses
3. Contacts with an email address that you are not sure are valid
4. Contacts that may have a more current email address

It also is important to keep in mind that it is best only to append email addresses under the following circumstances:

• An individual has opted-in to receive emails from you
• You have a prior relationship with this person
• The individual has not opted out of your email programs

Email appends begin by establishing the segment of data to add email addresses. Running an email hygiene report is necessary to identify the segments. Verification is then conducted to find out if the email addresses on file are current and active. Those that are not should be flagged.

It is important to find a reputable company that offers email verification and append services. That provider will process the data and assign email addresses to the missing files. Most append projects will add new email addresses to approximately 25 percent of your file.

Once you have the new emails you will want to reach out to your contacts. Not only will this process give recipients the option of opting out of your emails, but you can also identify undeliverable emails.

So what about data append? Data append is basically an email append in reverse. You are adding data or information about an individual on your email list to better target that person. What follows are some examples of the information you might want to add through data append: address, age, birth month or income. Of course, these are just the beginning. The options are literally endless for the type of information you can add using data append.

Data append is used mostly for individuals, but households also are an option. If an email address is not available for the person you are looking for, you can check if there is anyone else living at the address, for example, a spouse. You can then decide if it makes sense to contact the spouse.

Direct Mail Continues to Offer a Strong ROI

Posted by Livetournetwork on Feb 4, 2018 in Direct Mail Marketing, Pre-foreclosure lists. | 0 comments

In today’s digital age, many marketers have come to the conclusion that direct mail is no longer a useful technique. However, nothing could be further from the truth. According to a recent survey, 70 percent of Americans say they believe direct mail to be more personal than online advertising. That’s something savvy businesses recognize.

From 2015 to 2016, the amount of spent on direct mail marketing grew by more than a billion dollars, from $47.2 billion to $48.4 billion. This increase in spending can be contributed to strong response rates and a healthy return on investment.

Of course, the success of any direct mail campaign can be directly linked to the quality of that campaign. If you are considering direct mail for your business, here are some ways to make sure that your campaign is as successful as possible.

1. 1. Keep it simple. Americans are busy and don’t have time to pour over long blocks of copy. Make sure the copy on your direct mail piece is short and to the point. An attention-grabbing headline also is crucial.
   2. Make it pleasing to the eye. Visuals can make or break a direct mail piece. A crisp design or stunning photos will draw in recipients perhaps more than any other element.
   3. Integrate. While a direct mail campaign can stand on its own, integrating it with other types of marketing will help to drive home its message. Consider following up your direct mail piece with an email, for example. The more touches a marketing campaign has, the more likely recipients will be to remember the message.
   4. Personalize. Make sure you include the name of the recipient on your direct mail piece to give it a more personal touch. Personalized pieces are significantly more impactful than those that are not personalized.
   5. Test. No matter how effective your direct mail piece, it can always be better. The more elements you test, the greater results your campaign will achieve.
   6. Target. No matter how visually stunning, well-written and creative your direct mail piece is, if it isn’t going to the correct target audience, it won’t achieve the results it should. If you are marketing to real estate investors looking for vacant property lists, for example, you don’t want your direct mail piece to go to everyone in the real estate industry. Make sure you aren’t wasting your time and money on individuals or businesses that have no need for what you are selling.

Direct mail is alive and well in 2018. The key is to make sure you are doing all you can to make sure your campaign stands out from the competition and reaches your target audience.