Just kidding…sorry, that was a dirty trick, but I wanted to make sure that I made a few things clear!
In regards to my last blog post, I had a couple respondents that were a little discouraged because they seemed to think that what I was saying is that bank foreclosures will stop being a source of deals. Another email I received read as follows:
“kurtis you are obviously on the cutting edge and I’ve enjoyed your perspective and opportunities in the past, but you are totally mis-guiding your following with these latest emails. time to get real”.
I appreciate and relish feedback like this, and through clash of ideas and debate we all learn and deepen our knowledge.
However, I don’t think I was entirely clear about my point- I take the blame for being obtuse with my message and I apologize.
First of all, I absolutely, positively, do not think REOs are about to dry up anytime soon, nor do I think they will stop being our primary source of deals anytime soon as well…nor do I think the market is making a u-turn and is about to head back up anytime soon.
Here is what I am saying…in the past decade Cindy and I have now experienced two major shifts where our methods of finding deals ceased to work (in what seemed) overnight…the first time was in 2002 (buying HUD foreclosure went from a booming business to almost completely dry in a matter of months).
Then, after experimenting with a barrage of impotent business models, we went to buying preforeclosures. It was such a hot competitive that it took months more of trial and error for us to start knocking out homeruns again. Finally, we were knocking the cover off of the ball until, you guessed it, our solid ground gave way once again…in 2006, “Whammo!” …once again easy street went straight off a cliff when preforeclosures with equity became impossible to make a living from.
Let me tell you first hand, when this happens, when something really works well for a few years and you get it really dialed in, and then out of nowhere within several weeks it completely stops working…Well, it’s like being sideswiped by a Mack truck you didn’t see coming, and it is not fun…then the “OMG what do we do now?!” scramble dance begins all over again. So, I am not trying to be Chicken Little here, we’re more like a skitish antelope in the Serengetti where the slightest shift in wind, the slightest sound, we stop and observe.
If you are a part-time investor throwing offers out there, that is one thing. However, if you are full time wholesaler or rehabber there is something to be said about having more than one source of deals so you will have a backup should things change. This is all I am saying…..and you cannot deny that we are experiencing massive change. It is impossible I think to predict with 100% certainty what the outcome of government intervention will be, and I was not exaggerating about the frenetic buying activity exploding in our area – things are moving and shaking out there.
For the last 2 years we have come to rely almost solely on bank inventory for our deals, we are regularly getting incredible deals; however, I admit that this time around we ARE hyper sensitive to change …(people also thought we were crazy when we started writing bank offers at the end of 2006).
Although our business is thriving experience tells us to be downright paranoid; we watch the market like hawks and startle at the slightest bump in the night…we are on 24/7 guard duty for you.
So keep those offers going out, keep finding those bank deals, and keep your eyes open for new opportunities but don’t get too complacent if what you are doing works great, because the only thing that stays the same is that things will eventually change…and sometimes they forget to send you the memo first ; ).
Tags: Bailout, Bank Owned Inventory Palm Springs, Humble Pie, Learn To Wholesale, Southern California Real Estate
