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Transcript:
Chris Bounds 00:00
The big elephant in the room, we were talking offline about this as leads, like, right now we are at a historical low on sales volume, number of transactions that are being done, whether that’s off market or on market, all market is down. And it’s not that we’re in 2008 scenario, or prices are collapsing and Everyone’s panicking. It’s just, everyone’s just kind of holding still, no one’s really doing anything unless they have to. And that’s impacting real estate agents is impacting investors, it’s impacting wholesalers, long investors, short investors, short term rentals.
Basically, anyone in the real estate market? So yeah, leads is the big thing. How can you get leads, and I’ve been also telling people for years, like you gotta get creative. Like, if you rely on one single lead source, eventually, it will not work as well as it did before, it may not go away. Good. But at some point, it’s probably not gonna work as well as it did before. And if you haven’t built up multiple lead channels, then you’ll you’re vulnerable. So today, how are you seeing investors? How are you seeing them find deals in this market?
Burton Alicando 01:24
That’s a really great question. Well, obviously, we specialize in providing property records both on and off market, I will be honest, most of our users are always looking for the off market properties in Prop stream. But there are technically two ways to identify these motivated sellers. The first one I call the traditional search, which is what you’re probably doing already, you’re searching your markets that you invest in, and you select a list that’s provided by a software company. For us we have 19 categories that you can choose from like a tired landlord, a deceased owner, pre foreclosure MIDI. So this is the traditional search.
And the reason I call it that is it mimics what an agent and investor were doing before technology, they would go to the county and physically grab a list, take it back to their office, and then work off that list. So you can do the same thing in production, I can search Miami right now, click on the tax liens, make sure as equity, make sure it’s off market, maybe owned by an individual that lives out of state. And then I can mark it to that bit mimics what you were doing in the past, it’s much faster. But what separates us from the past, or what you were doing back then, is we don’t provide data, I have to remind people that we’re not a list provider, we’re data provider. And although we have 19 categories that you can choose from, we also have over 120 filters that you can apply when you’re doing a search.
And so over the last few years, it dawned upon me that there’s really a new way to search for motivated sellers and I call it building situation. You see, not everybody that wants to sell is going to be on a list. There are 1000s, if not millions of homeowners right now that wants to sell, but they’re not on any of these lists that you’re familiar with. For example, have you considered that homeowner who’s been sharing a house for 10 years with one bathroom? That’s a reason for wanting to sell why? Because their kids are growing up? Right? They’re going to probably need that second bathroom who wants a teenager hogging up a bathroom for a whole hour, right?
So it’s things like this, that I’m starting to see agents and investors start understanding that, hey, you know what, no one just wakes up overnight, and they’re in pre foreclosure. Nothing happens for like, for example, interest rates are climbing. So you can go in option right now. And instead of trying to look for an adjust a pre foreclosure, you can look for adjustable rate mortgages. Now, why is that? Well, because of rising interest rates, these are the homes that potentially can have new mortgage payments. And you’re either going to pay for it, or you’re going to need to sell or risk losing your property due to a default. And so this is at least something that I’ve caught on to where if you’re not understanding how to create scenarios or situations, and you’re just fixated on just, you know, always going after list. I kid you not you have competition that’s way ahead of you. And
Chris Bounds 04:18
yeah, it really comes down to you know, the end result you want, you’re looking for an asset, and you’re looking for an asset, it’s off market, which typically means there’s unique situations that are going to put that’s going to put them in a position to where they might want to sell it at a discount. That doesn’t always mean financial. It just means unique situations. And it’s that that story that gets them to the unique situation changes.
The story is different for a lot of those folks now than it was in 2010 by 2010. Most of it was financial by financial or either personally or financial, the home itself is underwater. Now, the equity situation all these homes is pretty good in the job market is pretty strong. So it’s not financial for most people, and even out of the 200 homes that we flipped. Most of the deals that we bought during that time, weren’t financially motivated. I mean, the money is always important, but most of them weren’t in dire financial distress. There were other motivating factors.
So building that story on how did they get here, and you just built that story with an arm? Like you can be in a pre foreclosure situation? How’d you get there? Well, you had to miss some payments, there’s delinquency. Now, it’s a little bit challenging to get that information. But what are some likelihood? What are some ways that people would be delinquent? And what are some warning signs that would make them delinquent? Could be past hack past your taxes? Yes. Could be areas where home insurance doubled over the last year to be an arm?
Burton Alicando 06:18
Absolutely, you nailed it, right. And it’s almost like taking what you’re already going after. And kind of reverse engineering, the process of how they got there. Like you said, No one again just wakes up and they’re in bankruptcy, no one just wakes up. And you know, they misick payment, things happen to get you there. Like Another great example is, you know, with inflation, that means material cost is increasing. You know, what does that mean to a homeowner that wants to remodel, right? What they were paying for five years ago is not the same price to remodel today.
And right now have doubled the cost to get that roof on top of that, that new roof on. So just understanding that situations happen, that aren’t always going to be documented on a list is very important. So keep your phone with you, you know, when you hear interest rates are climbing. Again, you should definitely be looking for those adjustable rate mortgages. If you’re new here, hey, lumber has skyrocketed. You should be finding properties that were built 50 years ago and reaching out to these homeowners and ask them you know, do you?
Are you going to remodel that dilapidated property? Or do you want to perhaps live and go for something more modern? It’s understanding that you’re dealing with people, not a list. And once you understand that, I think you’ll start realizing, maybe you’ll go into that nio mode, we’re probably now look a lot different. It’s not it’s no 19 list to choose from it’s, I can create anything I want to and this platform. Yeah, and
Chris Bounds 07:41
reading beyond headlines of news articles. So you’re not necessarily reacting to, you know, the headlines or whatever’s going on in the news, but really going in with an open mind. And what does this mean? What does this mean, in this in this macro or micro sense? But also what does it mean in the macro sense? And how does that apply to my business? But more importantly, how does it apply to my target audience? Which if you’re a real estate investor, at least in the single family, how we’re describing it here, it means homeowners, how does this apply to homeowners? Now, they’re very well could become a case where FHA comes out with a 40 year mortgage.
Now, how does that apply? That’s exactly what I think, how does this affect the market? What does that mean, to me, just hypothetically speaking, what we’re not hypothetically speaking, but the first thing that pops out of my head is now, homes become more affordable, even with 7% interest rates. I mean, we’re at a 20 year high now, with mortgage rates, homes just became a lot more affordable.
So what could that do? Might take up transactions might start another research, price growth may have an impact on rentals, because people have been held up in rentals, and maybe they come out and go by, I don’t know, um, I mean, it can be a lot of things, but things that’s what you got to think about when you’re when you’re reading these articles, and how dissecting how it applies to your business.
Burton Alicando 09:16
Yep, you know, the run in the head, as they say, cause and effect. And so there’s always something that will happen. And so keep your eye on any news in the housing market, or financially, that’s going to ripple into the housing industry.
Chris Bounds 09:29
Yeah. And then I’m gonna stand on the soapbox real quick. Also, being consciously aware of not putting your predetermined thoughts and opinions into a data set. So I talked with folks that are absolutely sure. A cliff is just right around the corner, like a financial cliff. Real real estate The market cliff is right around the corner. Yeah. But when challenged, because Because could that happen? Yeah, 100% Sure, but when challenged, the data set is very vague, but also very wrapped up into opinions on political policy regarding taxes and monetary policy and leadership in Washington and helicopter money, all of which do have effects on the economy, but doesn’t necessarily mean you know, that opinion is going to be true.
So it’s just being aware and then also you taking Ray Dalio Ray Dalio as approach. When you have an opinion, you feel like you have the data thinking, how can I be wrong about this, like, challenge yourself? Like, this is what I know this is what I believe but what are ways that I could actually be wrong? And then just really red teaming it? I love it. If you haven’t read Ray Dalio has a book out principles highly recommended.