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Cindy,

I hear you loud and clear! I wish more investors could understand the process as well. The old, "Get rich quick" schemes are still around. The ones making money are the ones giving these classes, so we're likely to see much more of it as the markets get better. We really need to be educating our clients, as you did so well here. Great post.

Cindy, thanks.

Yes, everyone talks about "foreclosure" today.  But most of them don't know the difference between "pre-foreclosure" and "OREO."  Will they listen to your advice?  I doubt too.

As I know, the most difficult way to make money in a distressed housing market is the one those gurus promote.  That is a property under "NOD" thru "NTS."   Not only you need a lot of guts and knowledge in yourself, but also a lot of luck and facilities from others.  It is a field needs "perfect" expertise from a SAVVY investor.  It is a jungle, absolutely not for the general public.  But in practice, no savvy investor will like and work on it intentionally, except some lucky situations happen on his way. 

It is really so tough and difficult a job that a seasoned investor like me don't even like to spend my time on.  In Cali, doing that can easily get you into a crime behavior if there is a little bit step out of the state regulations to protect a distressed owner.  If it is so easy, why those gurus sit there and talk?  They will have no time when busy in digging out their wealth, right?

Yes, there is a "quick rich" program to get you quick return and financial freedom.  But not those guys'.  With more than 15 years of experience, I have developed my own program that I call it "American Poor Folk's Egold" in my group or my bog here.  It is super safe and with little money involved.  You can check, review and critcize the ideas and investment goals.  It is free and full of real cases I did when I write my article.  

I want to give away free my experience to help our poor folks as my retirement hobby.  I have no plan to sell it though.  

BTW, there are so many agents who are used to "dumb chat" too.  I regret to say that they don't know how to swim, while working in a swimming pool facility.  Wake up, you are a self-employee, not having a 9-5 one.

Cindy,

Solid advice for would-be foreclosure investors. It isn't nearly as simple as these seminar people make it to be. Basically, the only ones who make real money in this are the seminar promoters, as has been the case for so long.

Now if only the people who are getting suckered into believing this is the way to make money could read this post! Discuss it all we like, and know we are right about the way it really works, but who will the buyers/investors believe? They have probably spent a lot of money on the seminars or information they bought, so th people who sell that are seen as the professionals and the authorities. We are lowly Realtors who are trying to make a sale at all costs, so we will say anything... Or that's how the public perceives us.

Yeah, people are making a lot of money "fliiping" or rehabbing and selling distressed properties. But in most of the cases I have seen, what is made is good money, but far short of what the average seller thinks he is going to make. Most people don't understand the process of REO listing. After a few BPOs and possibly an appraisal, most of these properties are listed at or near market value, given their condition and current market. Some of these seminars and infomercials lead people to think that they get prices at what is still owed against them, so the best deals are ones where the property has been owned several years and there is more equity. That may be true on the courthouse steps, when you haven't been abletoget inside and inspect a property and you are buying all title defects, etc, but it isn't true after the bank owns the house. You may get lucky and find one at a decent price that the bank is motivated to get rid of more quickly (end of month/year closings are really pushed for).

I havesaid it before and will keep saying it until I either get sick of hearing it or people start to learn.... The BEST way to find the good deals, foreclosure or otherwise, is to work with an agent who specializes in REO or investment properties! You think I only watch those that I am listing? Heck no! I watch EVERY trustee's sale published in the area. I watch every property that I see a pre-foreclosure BPO on. I Watch every REO that gets listed with the other agents around. Most of the agents who specialize in these properties do the same things. We know our market and these are things we are eager to use to help our buyers/investors/clients. AND, we don't make you sit through an all-day seminar or pay lots of money to get information. We may need (according to our state laws) a written buyers' agency agreement to advise or provide such info, but it is part of our job. It is the gamble we take all the time in the hopes of it generating some sales. So if you are interested in investment properties or REO, see who handles them in your area and contact that agent for accurate information. Save the money you would have spent on the seminars or the programs touted in late-night infomercials, and use it for paint and other rehab supplies...

Amber,

It sounds to me that there is only one breed in the world that knows REO or distressed market: REO listing agents. 

If that's true, how come those agents are NOT making a lot of fortune (Yes, I do know some are making money through their investor group by "inside trading")?  Yes, I do know their fiduciary duty to a seller limits their opportunity (It could be "double escrow." that is an illegal one, not a legitmate one).  Excuse me to ask a question: are you making some money enough or can say that I am able to quite my current job to NOT worry about tomorrow?  Because you are confident that you own a skill to easily make money in RE.

In 5 years, I have never really worked.  In the past 2 years, I only used my credit card to purchase REO's without help from an agent.  I am willing to open my NET ASSET record for you and I believe you will say: "How did you do it?"  Because you can't deny my net worth in paper grows Ten times more than my seed money I got from credit cards.  In real terms (that means If I sold my current properties for"quick sale" at 40-50% off market price), you will say I have at least 300% return in 2 years.   

Common, give me a break! 

Please don't just look at this trade field and feel content.  We really are in a better position to have financial independence than other so-called " investors" because we are inside the field everyday and have "marketing edge" to better be a winner.  But just like I said, a commission-oriented agent goes no where.

p.s. I really hate to use "investor" to present myself since it is a so notorious term caused by those RE Gurus.  I introduce myself by "retired.  But I am interested in buying and selling houses."

Cindy,

I am with you.  As I said in my blog, "mortgage is world-wide business, real estate is almost purely local business."   Even with some retirement fund, I don't think I can live there easily and there is no fun to do real estate investing.  That's the reason why I moved to Texas where is a good market for me to have fun and play E-gold games.  I used to live in Crytal city when I had a job in D. C.  But I don't know anything about RE in your state.  As I know, your next state NC and SC are good places to play Egold game too.

I respect other's right to make choice.  They are responsible for what they have done as people said "you are what you eat" in diet business.  

There is a saying that "Men go high, water go low."  I would like to say that any one who wants to be rich has to know where money goes.  Don't just listen to those guru's speech which is totally B. B to sell "hope or dream" and take money away from the poors.

Go to where money goes?  We have to know one of the intrinsic tendency of money: they go "HOT."  In order to make money, a poor folk is not so lucky as Dahbai's sovereign on whose door Citi bank knocked last week.  A poor folk has to realize that with, inferior financial position, he has to go out and look wisely to find a opportunity to get money.  They needs workable plan, sacrifice, and discipline to follow through the plan and get job done as he planned.  I know it is not easy for some people.  But really that's their choice.

Some listing agents are like a dumb duck, idly sitting on MLS.  I agree with you that Amber is obviously a good listing agent, doing her TLC service and with love to the publics.  My best wishes to both of you.

Those agents are victims of the book "Nothing Down", I suppose.   I saw a lot of agents were eaten by aligators (negative cash flow) in Cali.   A lady agent who came out of a #1 university went into insanity when she lost 9 properties in Orange County, CA.  I really don't understand why there is a chain reaction like a domino scenario from the 1st one down to the 9th.  Don't they know a non-recourse loan and set up a losing point somewhere?

However, it is really not Robert's fault.  Why those agents just read his book without a brain? 

Ed, I never said that REO agents are the ONLY ones who know how to find distressed properties. My post was not targettes as much at other REO agents or investors, but more at the wannabes, those who are inclined to think they have to attend a seminar or pay for some program teling them how to find properties, how much to pay, what to do to get them ready to sell, and how much money they will makedoing so. I am glad that you are making good money without having to work hard, but the truth is, most people who are trying to buy properties to flip, DON'T have the necessary knowledge to do so. A seminar is great, but I am willing to bet the same people travel all over the country teaching the same program, no matter what type of market area they are visiting. That is deceptive. What works in, say, Los Angeles, will NOT work here in the Ozarks. The potential earnings here will NOT equal the potential in other markets. How do I know this? Because I know my market! I see what homes areselling for, I can estimate repair costs fairly well, and know what a rehabbed home is likely to sell or rent for in my area. Presenting one program to peole in dozens of different markets is deceptive, because it won't work the same everywhere.

That is why I say, for people who want to start investing in real estate, or just wantto find a bargain, the best bet is to work with an agent who knows these properties AND the area. You won't be successful without knowledge of both, or without working with someone who understands both...

Amber,

I agree with you as I said: "Real estate is almost purely a local business."  I am with you that most of gurus are selling "hope" as those selling cosmetics to a lady in their words "to help reduce winkle" (Be careful, it is said "help", no guarantee to make your wrinkle disappear permanently.)

There were so many trading groups, such as 10 biggest trading groups in Japan 30 years ago.  Where are they now?  Nobody needs their service in the cyberspace.  Kmart can do business DIRECTLY with a foreign manufactures, such a term "OEM" came out a few years ago.  Those middle men were cut out and disappeared in international planet.   

With right knowledge, no one needs an agent.  I am so sorry to say that.   Since Cyberspace age arrived here, we are able to collect needed information to do our own right business with a calculated risk in RE.  If the general public know the tricks, could our RE brokerage channel will follow the suit of those big trading groups who used to dominate international trade? 

Since the "If" mentioned above is a real big "IF," maybe the established conventioal agent system still can survive for some times.  But, it is very clear for us to see new marketing channel is emerging to challenge almost everything, such as Ebay.  We are not immunized.  Can we be safe to say our RE brokerage system is safe from the product life cycle as economists defined.   I don't know.  

But I am with you that most of average people are buying useless program to satisfy their "hope" and pacify themselves.  They are not an actor or a real pro investor, let alone using their brian power. 

Hope the big "IF" is not a real thing.  But I am really doubting how an agent can well prepare himself or herself to cope with the future shock brought out by the challenges from a "transition" to easily survive our industry.  Are we going to stay intact in the current stage having a very uneasy life and not so much bread  to bring home while facing fierce competition? 

You tell me.  It is your life.     

Thank you.

You have a good point in your post that I agree has to be addressed   And you did it well so far.  Hope your points get across to reach the general publics.