ForeclosuresMass - ForeclosuresMass Monthly - Success Story - How a Father and Son Team Meet their Goals (January 2005)

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."