There is no doubt that the California Real Estate Market has seen some dramatic changes over the last few years.
I started working with distressed real estate as early as 2006, when I did my first of several thousand BPO's that I now have under my belt. At the time, I recall being laughed at by a local agent - to my face - criticizing me for my lack of judgment and too busy chasing $50 at a time opposed to earning $5K or more in a real estate commission. I'm sure many more did the same behind my back.
In March of 2007, I listed my first short sale. It was tough, I admit. A dozen more quickly followed. I took every course I could and researched the topic extensively. Again, what I was doing was perceived as a complete waste of mine and everyone else's time. I was actually accused of ruining the market.
Imagine - me having enough influence to alter the market one way or the other. I thought that was cool - but completely unfounded.
Short sales were really tough to close back in the spring of 2007 - did meet a lot of good buyers that I made some good money with that year...but closing the short sale listings was a big uphill battle with few victories and overwhelming defeats.
||| SIDEBAR |||My favorite short sale story was my first. It ended up going to the bank and selling REO 6 months after it went back for $65K less than the motivated offer I had on the table. The kicker is the seller is now in escrow with me for a new REO listing. The cycle has gone around and there is hope for those who lose their homes. God Bless America!
Just like BPO's were a natural progression to Short Sales - Short Sales were a natural progression to my REO Business - where I received my first of hundreds of listings in August 2007. I don't think I have to say too much here - lets just say I had a real good run until the moratoriums of 2008 - the election year.
Since then, the REO side of the business never recovered to what it was. Margins started to shrink and listings became less and less. Each quarter was just a little less profitable than the proceeding one. Managed to hang on to hope for a wave, waiting for a tsunami release from the 'shadow inventory'. Well, it hasn't arrived yet and I for one am tired of holding my breath waiting to get flooded.
THAT WAS THEN - THIS IS NOW
I shared the above, as a snapshot of the progression of my real estate business over the past 4 years. I pride myself for being forward thinking and staying ahead of the market and not chasing it. By the way, the agent who laughed at me for doing BPO's had a job at Sears over the Christmas season selling appliances - not sure if he still has that job or not...I do know he lost his home. (Glad I didn't find the error in my ways back then and ask him for advice.)
I believe I have progressed into a small niche that will carry me through the remainder of this economic cycle and allow me to earn a whole lot of money, with very little competition. If my plan comes together, the way I am going, I plan on transitioning into the commercial real estate market and work that for a few years before I semi-retire. As you know, commercial real estate has always been the more profitable than residential.
Until then, I am sure I have several good years in my new niche. Let me share a taste...
COMMERCIAL PROPERTY TAX REDUCTION
Let me start by saying this niche is very unique to California. Yes other states allow for similar actions - but California has a very unique property tax system. I cannot answer any questions about any property outside of California.
I have aligned myself with a company that has several offices throughout the State of California that specializes in working with property owners to use the leverage of California law to reduce the assessed value of the real estate and therefor reducing the property taxes due year after year. The principals of the company did very well with this exact business model during the rescission of the 1990's and started it up again, as forward thinkers back in 2006.
Let me give you a very basic scenario, computing the property tax at just 1% of the assessed value (actual tax rates vary - never less than 1% of $1,000,000. The annual property taxes, for this example are then $10,000. We then put together a case to convince the powers to be that the assessed value should be reduced to $700,000 - a tax savings of $3,000. In exchange we earn a contingency fee based on a percentage of the actual tax savings.
The downside, unlike so many scam companies who claimed to provide property tax reduction services and charged a hefty advance fee, we only get paid when there is a documented savings - never out of advance monies paid for by our clients. The pipeline can be up to two years or more...which greatly discourages anyone from duplicating our unique business model (that worked so well in the '90's). Of course, like any pipeline, there is always low-hanging fruit...
THE OPPORTUNITY - VALUE ADDED SERVICE
The company I am working with has gotten very aggressive since I aligned myself with them in January (about the time this blog went into hibernation). I have brought my real estate marketing expertise into the mix and we have started a substantial period of growth.
Let me say right now this is NOT some slick marketing company with lots of bells and whistles and fancy literature...we work hard, do a great job for our clients and earn lots of referrals (and make good money too).
Today, we are looking for others to join us. We are creating partnership opportunities for those who have contacts we can work with. While I believe this is an excellent opportunity for commercial real estate brokers, certainly residential agents who are in a market of million dollar plus residential real estate will also have a client base that would benefit from our service.
Aside from the obvious partners in real estate, others who can bring a unique value added service to ther clients and contacts would include mortgage lenders / loan officers; title reps; home inspectors; insurance agents and anyone else who knows owners of million dollar properties.
At this point, we are not 100% prepared to firmly negotiate partner agreements - we are, however building an interest list. If you have the contacts of California property owners in the million dollar plus range then we want to structure an opportunity for you to be the hero in offering a value added service by allowing the company I am affiliated with to file property tax appeals for any clients you refer...and earning a piece of the action.
Anyone we select to work with as one of our local partners will have an ongoing business - we are not looking to give anyone a job at this moment. Depending on your level of interest and available resources (office, phone system, office equipment, etc) we may even consider bringing you closer into the fold and establishing a local office where you are.
Anyone who knows me here in ActiveRain knows that I am an honorable person and not quick to promote any product or service - never have recommended anything to anyone without fully believing in it myself. So do yourself, check out our website, and drop me an email briefly sharing a little bit about yourself and how you can contribute. Make sure to let me know what area you live/work in and have expertise. Let me know a little bit about the type of client you have access to and can use your influence to check us out.
Send your email to CAPropTax@Gmail.com.
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