Investors, here on Active Rain, feel they are trying to catch smoke in a net. We frequently see question from agents who represent investors, and directly from investors themselves inquiring where to find business or what to do now that it is clear their business is about to disappear.
Here are a few of the facts from boots on the ground observations.
The distressed market in the Tampa Bay region has fallen to approximately 500 identified in public records for April 2016. Competing for these 500 home owners are attorneys, REALTORS, mortgage brokers, investors and even citizens wanting to snag a deal outside the 'system.'
As we know, everyone is using primarily the same resources to identify and target homeowners and as a result their mailbox explodes with promises to help.
How effective are these direct mail efforts?
One attorney shares he abandoned the expensive billboards and relies on direct mail. In May he mailed 3,318 letters and received responses from 42 owners. (1% response rate)
As each of the participants engaged in the distressed real estate marketplace shared, there MUST be a unique offer or gimmick to get any response at all.
One real estate broker offers a 'Cash for Keys' solution accompanied by what appears to be a B of A check for $3,000. It is a marketing piece that gets attention with the ultimate goal to BUY the houses.
Those in this market segment are looking for options. They are uncertain if they will still be standing when distressed properties settle to pre-2006 levels, or lower. At this time most feel as though they are trying to catch 'smoke with a net.
What we as real estate professionals can glean from this data is:
#1. Response rates for direct mail, for good pieces, aligns with our own experience for 1st mail
#2. Excess capacity currently exists looking for a place to be invested besides the distressed real estate market segment.
#3. Collaboration potential exists between these investors and real estate professionals to share knowledge and develop solutions that better align with the expectations of the emerging economy.
What do you see as good collaboration opportunities?