ForeclosuresMass - ForeclosuresMass Monthly - Interview with the Expert - Strategies for Building Your Real Estate Network (January 2007)

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.

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.

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!]

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.

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.

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.