Interview with the Expert
Often times, real estate agents, attorneys, and appraisers know a
house is headed toward foreclosure - before the foreclosure
notice is made public. As an investor, you can find these homes,
too. The key is to build a solid network. Cathy Toomey, a veteran
real estate professional with close to 30 years of experience,
gives us her insider tips for building this all-too-valuable
network.
ForeclosuresMass Monthly: Cathy, you're a well-connected
individual in Amesbury and Newburyport, Massachusetts. As a
Broker / Owner for Stone Ridge Properties, you seem to be
everywhere and know everyone - business colleagues and
individuals alike. How would a beginning real estate investor
build a network of people like you?
Cathy Toomey: That's a good question, and thanks for asking.
First off, I think it's important investors know that real estate
agents are often the first people homeowners call when they know
they're in trouble and need to sell their home before the bank
forecloses on it.
FMM: Does this mean you know about homes headed for
foreclosure before they go public?
* Next 37 17 investors only!
CT: Yes, that's correct. Usually what happens is the bank
will call a real estate attorney to start the procedure -
because as most of your readers know, the law office publishes
the foreclosure notice. So real estate attorneys are the first
to know - after the bank. But, individuals will call me to help
sell their house - fast - because they've lost their job or
their interest rate went up and they can no longer make
payments.
FMM: Do you get these calls often?
CT: Yes, you'd be surprised. You have lots of nasty
lending going on right now - you have "no doc" programs where
people don't have to submit documentation about their income.
Real estate agents can sometimes see the foreclosure coming
before the sale is even final. Right now I have several listings
for homes headed for foreclosure that haven't yet been made
public. However, what investors need to know is that real estate
agents - and attorneys - are bound by a code of ethics. We can't
say, "Hey, so-and-so's going to lose their home!"
FMM: So how would an investor find out if a home for sale
will be foreclosed on in the near future?
CT: That is where networking comes in. If I know an
investor is looking for property, I will call him or her to say,
"I have an owner who is motivated to sell." Or, if the owner has
given me permission, I can say something like, "They really need
to sell this house and are receptive to a 'different' kind of
offer." Investors can also read between the lines in the real
estate ads - "motivated to sell" can mean the owners are about
to go into foreclosure. It can also mean the owner simply needs
to move out fast because of a job change, so you want to be
careful.
FMM: How does an investor get to know someone like you?
CT: My advice is to get out in the community and let real
estate agents get to know you. Places were you can find someone
like me include Rotary, the Chamber of Commerce, and
community-related boards. If you're an investor and live here in
Amesbury, you'll get to know people like me in no time. You can
also attend real estate networking events or join a real estate
investment club. [Editor's note: Be sure to check out, Turning
the Key, ForeclosuresMass' monthly networking and education
event!]
FMM: Is it easier to build a network in a small town
versus a larger town?
CT: I would start with a small town only because it's
easier to get to know the key players in the real estate
industry. In Amesbury and Newburyport, for example, you could
meet most of the key players at one event - we all attend
everything! You want people to see you as a trusted resource, so
it pays to become a participating member of the community.
FMM: What about direct mail? Would you be receptive to a
letter from an investor you haven't yet met?
CT: Actually, that's a great idea. I get very few
letters, so if an investor sent me a letter introducing him or
herself and stressed their ability to close quickly because
their financing was in place, then yes, I would keep their name
on file.
FMM: What should an investor not do?
CT: Call me. I'm too busy! Seriously, don't call me
asking if I have homes about to be foreclosed. I probably do,
but I can't come right out and tell you. Most likely, I'll say,
"Yes, I have a few motivated sellers" and it's up to you to read
between the lines.
FMM: Do you have any other tips for investors with regard
to building their network?
CT: Like I said, the bank will usually begin a
foreclosure process by calling a real estate attorney, so you'll
want to include them in your network - and for doing that
thorough title search once you have a property under
consideration. And yes, it pays to get to know bankers because
they are the first to know when a property is headed toward
foreclosure.
Ditto for appraisers - sometimes appraisers have a "heads up" on
what's coming down the pike because the bank has asked them to
do a "windshield appraisal" on a property. Let these people know
you're a serious investor and that you're ready to roll with
regard to financing. Once people know this about you, you'll
start getting calls.
FMM: Whom else should investors have in their Rolodex?
CT: That's another great question. You'll definitely want
home inspectors, mortgage lenders, and of course contractors -
plumbers, electricians, HVAC, dry wall, painters, etc. - for
when you refurbish the property once you own it. And you'll want
real estate agents who can help you sell or rent out your
investment property. Don't forget, the key to networking is
getting to know the right people and then having them introduce
you to their network of trusted resources. The more people you
know, the easier your job and the more successful you'll become.
Cathy Toomey is a Broker / Owner for Stone Ridge Properties, a
company specializing in residential real estate. Contact Stone
Ridge Properties at
www.stoneridgeproperties.com
or by calling
their Amesbury office at 978-388-0880.
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