The Science of Flipping - Episode 170: Pre-foreclosure List? - Real Estate Investing, Buying and Selling

Episode Date: September 29, 2020

People are always looking for the best motivated seller list to market to. Well, since you are a marketer, you need to figure out who has the most motivation and how many people have that motivation to sell their property. Justin goes in depth on the Pre-Foreclosure list and if that is the best list to use. 

Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Yo, yo, what is up, the Science of Flipping family? What is going on? Welcome back to another episode of The Science of Flipping podcast. I am your host, Justin Colby. If you are not yet subscribed to my YouTube channel, please go over to YouTube. Just look my name up, Justin Colby. Make sure to subscribe as I constantly am dropping free content, knowledge, and trainings for you guys here in the real estate space. So go to YouTube, subscribe to my YouTube channel, and make sure to watch those free, very free trainings, just like this podcast, as well as I have the Science of Flipping

Academy group on Facebook. Go over there, completely free content, high engagement, and I am dropping a lot of knowledge in that group as well as many others are thousands of other investors are over at the Science of Flipping Academy. And I encourage you to get over there. So with that being said, I wanted to bring to light something that I think a lot of people are, I don't know if they're thinking about this correctly as a moment in time. And so I wanted to bring this to light as a point of discussion, as a matter of fact. And I would love to hear your feedback, whether you watch this on YouTube, whether you listen to it on iTunes, or maybe even catch it in the Science of Flipping Academy group.

Would love your feedback about this concept that many people are, you know, what I would say is many gurus or people in my position where we're here to train and educate are talking about marketing for pre-foreclosures. And I'm asking you to change your mind frame because I'm taking a look at the landscape and I'm going to do further research to support this episode, by the way, to see if just my kind of common sense slash small amount of research is actually somewhat accurate. But in Phoenix, it would not be highly advised, in my opinion, to be marketing for pre-foreclosures. We have some record lows, to my understanding, and I'm going to get the exact data for my own purposes,

but also to give to you guys here specifically in Phoenix because we have something called the Cromford Report, which is some of the best data I have ever seen. And so I'm going to get this, but I do know that there are little to no homes going to auction, which means there's little to no homes going to auction, which means there's little to no homes getting foreclosed on, which means there's not that many people in a position of pre-foreclosure. And so I ask you and I ask anyone who is listening, if you've ever watched another training, if you've ever been a part of another coaching program or whatnot, and you've heard about this focus on pre-foreclosures, focus on pre-foreclosures, let me spin that on its head. Because as the time being right now, and I know

this sounds crazy because it's June 26th as I record this episode, the real estate market is still on fire. It is still going nuts. It seems crazy because we're quite literally in the middle of a pandemic. We may even be shutting down again. Who even knows? Obviously, the social situation across the nation does not even need to be commented on here about how terrible that is. But the Phoenix real estate market is still appreciating. And that means there is little to no foreclosures, which means there's little to no pre foreclosures. So I asked the question, is pre foreclosures the best targeted list to be focused on? Now, I don't tend to market directly to pre foreclosures. I tend to go wider. I do have a larger marketing budget, but I would encourage you to rethink this idea and start to realize that there are a lot of people not in a high, high position of motivation based around their mortgage. Now, think about what I just said here, right? Like I'm saying their mortgage very

specifically. Are there people with high, high motivation because financially they might be in trouble? They may have gotten laid off. The company they work for may have gone out of business or a number of other reasons. Is that possible? Yes. But is pre-foreclosure, which is very specific to someone's mortgage, a highly targeted list that can produce any level of volume? I'm going to answer no. I'm going to continue doing this research for you guys. I'm going to bring to light some of this research. I have some pretty smart friends, way smarter than I am, by the way, that I want to engage in this conversation. But I'm looking just overall, and I do have, you know, a couple handful of private clients that I work with. I do some group coaching as well. If you're a newbie and you are looking

for advice, we do some group coaching, very small group, less than 10 people. I personally will do it with you. If you want something like that, go ahead and send me a direct message anywhere, Instagram, Facebook. I will see if you're a good fit. But I've been talking about this idea and I just really would encourage someone who is just getting started out. And I know a lot of people have many resources they're listening to. It's like information overload, but I'm questioning this one philosophy that a lot of people point towards, which would be pre-foreclosures is your best targeted list. There are a lot of targeted lists, but let me be very clear here. I'm not telling you it's not worth marketing to. That is not what I am saying.

What I am saying is don't make that the only target you're going after. Because in Phoenix specifically, I know we are at record lows. I will find out the exact numbers, but I do know that we're at record lows. But are there other reasons people might be financially motivated besides just their mortgage? Absolutely. And those are some of the things that you also maybe want to layer on when you are marketing. As I do mention, I'm all in on marketing. I have a product called the Marketing marketing mentor that quite literally lays out my entire marketing process and you need to have at least three marketing strategies, but I'm questioning that list as a moment in time. So it's more food for thought. I'm, I'm kind of, uh, this is like stream of consciousness conversation with you guys here

on this podcast, because I actually do believe we are in an interesting position. And I'll leave you guys with this. I think this is my big, I've been thinking a lot about it because it doesn't make any sense. There's no logical, reasonable sense for the fact that this real estate market is still doing as well as it is. I think we are in the midst of something similar to what people probably saw in 2004 and 2005, where we're like at this incredible moment and it's on the verge of this massive wave. I don't want to just say of foreclosures, but this massive wave of something big happening financially in a negative way. Whether it is foreclosures, whether it is, you know, people not being able to get loans, whatever this is, and I don't have

a crystal ball, but I do believe like we are sitting here and if you think about being a surfer is what kind of comes to mind, like you are right about, you are seeing this wave build almost, right? And, you know, if I could put the 2020 version of 13 years experience into the 2007 version of a rookie of me, or even maybe six and five, I would say there's something brewing big. And I think it's going to be in the negative way, meaning I do think home values will start rolling backwards. I think there will be challenges with lending, maybe after this whole blanking presidential election, right? After all of that is over. But looking after 13 years of this, I think we're on something big. And so I would also then say, be patient, keep fighting the good fight, keep

marketing, keep focused, but maybe just think about is pre foreclosures and that list specifically the list you should be targeting or only targeting. Maybe target it. There are deals to be had. There are people in that position 100%. But can you create a business out of it? Or could it be like one deal every quarter type of idea? I would pose that question to you. Again, I'd love to hear your feedback.

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