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How a Father and Son Team Meet their Goals
In the beginning...
Adam Scarcella, software engineer by day,
real estate investor by night, stumbled across ForeclosuresMass
14 months ago. After reading,
Are You Dumb Enough To Be Rich?
, Adam decided
that pre-foreclosures were the best way to break into the real
estate business. He and his father bought one year's worth of
foreclosure data for Essex and Middlesex counties. "We chose
those two counties because we live very close to the border
between the two counties and we wanted to stick to a 30-mile
radius. We also wanted to make sure that the potential properties
were close enough for us to personally inspect."
Setting Goals and a Deadline
Adam and his father set a
goal to buy and sell their first property within one year and net
a profit of 40%. "We wanted to flip enough properties and grow
our capital to the point where we can purchase a multi-family
property and hold on to it as a source of residual monthly income
and start the process all over again."
Obstacles
Adam and his father made a
list of obstacles that they might encounter along their journey
to buy and sell their first property, such as rejections from the
homeowners and obtaining money to finance the deal. Better still,
they found ways to overcome those obstacles by using the
resources made available to them on the ForeclosuresMass website,
reading investment publications and attending investment group
meetings.
Action Items
"Our strategy was
simple. After downloading all of the information from
ForeclosuresMass, we sent out letters to the homeowners. At
first, we weren't sure what to say so we read the book
recommended by ForeclosuresMass,
Are You Dumb Enough To Be Rich?
by G. William Barnett II. Chapter 10 is
titled Pre-Foreclosure: "The Preferred Choice" and indeed it is.
We followed the 6 simple steps outlined in that chapter and sent
our letters off to the homeowners."
Staying Focused
Adam and his father send
out 10 letters the first time they received their email alerts,
since there were only 10 foreclosures in their counties. However,
the next week there were 118 foreclosures, so they sent out 118
letters. "We had two responses. One was to tell us that they
were going to list their house with a real estate agent, and the
other was to tell me to stop mailing him letters." Things
don't always happen the way you plan. Adam and his father kept
focus by revising their letters and re-evaluating their goals.
Within a few weeks they received the phone call that would prove
to be their first purchase.
* Next 37 17 investors only!
Measuring Progress
They responded simply by
asking them the W.O.W. questions and entered their answers into
Adam's database. "The real key to our response was that we
genuinely wanted to help these people and not come across as
being greedy. It is a very difficult time for them and emotions
run high. We set up the deal so that they would receive 60% of
the total potential profit, and we'd take 40%. It took us
one month to land our first deal." As the 10% down
payment, they used their line of equity, and then financed the
rest. The financing wasn't difficult to obtain since the condo
was purchased below the amount it was appraised for by the
bank.
After one month, Adam and
his father sold the property and yielded a 38% profit - 2% short
of their goal. "During that time, another property peaked our
interest and we went through the same process. We met the
homeowner, explained how we could help them and bought that
property. We are hoping that this sale will net 40%
profit."
Future Goals - An Ideal Scenario
"We are looking to
invest in the multi-family in 2005. Our long-term goals for the
future are very ambitious. We want to build a completely
self-sustaining green community based on solar hydrogen
technology from Malaysia and we are formulating our ideas onto
paper as our next set of goals."
Adam Scarcella can be reach via email at:
adamo97@comcast.net
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