Asset Management & Recovery: Another Way Into REO - Or Maybe I am Wrong

I have gotten a lot of emails lately from AR members even though I have not been posting much.  Maybe I am burned out a little.  Who knows?

The emails have been questions "how to" and "where to go".  I am glad to help if I can.

I don't know what advice I can give to the general question of "how can I get started in REO" other than to think about Nike.  Just Do It.

Look on the internet and start registering on websites to become a vendor.  The main ones as far as I am concerned are http://www.reonetwork.com/  and http://www.reotrans.com/.  Be willing to do BPO work.  If you ask me, things like Titanium Solutions are a waste of time.  That's just me.  There are others with a different opinion.    

Truth is though that everyone is chasing the same banana.  The ever elusive national loan servicer !!!  If it were me, and it is me isn't it? 

Reminds me of a line in Full Metal Jacket....."Is that you John Wayne, is this me..."

......I'd chase the guy that nobody is chasing, the commercial loan workout guy at your local bank.  They are a member of the community and you can drive to see them.  To these people, I am a professional.  They see what I do in the community.  They know the people I know and have respect for people that have respect for my work.  They know my attorney, my accountant, my banker and my friends.  They see me at hockey games with my family and walking down the street.  I run into them at the mall.  With these prospects, I probably have instant credibility. They see my signs and "have heard of" me before.  I am not a number.  My list of A prospects is 460, but only about 10 are national servicers.  Over 90% of my effort is spent on these relationships and less than 10% spent on chasing the national guys. 

I would also suggest that you find a mentor and work with them.  Maybe find a team to work with.  The reason for this is that one can not possibly learn everything there is to know overnight.  AR is a good place to read and learn too.

Whatever you decide to do, team, no team, self taught or seminars, you need to hunker down and get in the game.

Are you going to screw up a little?  Yep.  It happens.  Is that error going to teach you something?  Yep.

I've been doing this for over 10 years and still make a mistake now and then.  It happens.  You recover and move on.

Here are a few of the things I have learned.  They sound simple, but took me a little while to figure out.

•·        Use combo lockboxes, not electronic.  Buy them online from http://www.bargainlocks.com/ cheaper than from http://www.nuset.com/.  They are $10+/- vs. $80 +/- for electronic.  Also, sometimes other non-realtor vendors will need access.  They don't have lockbox keypads.

•·        Use http://www.showings.com/ to set showings and keep track of who is going in and out.  This costs about $10 for the life of the listing.  This means that for $20 +/- you get the lockbox on, tracking of showings and easier access vs. $80 on an electronic.  On your fist listing you have a net increase in revenue of $60.

•·        Use basic coroplast signs instead of the fancy ones you use for retail type listings.  These cost about $3-$4 each vs. $20 each when you buy 100.  Also consider your frame costs at about $17 each.  The best price I found was through Jim at http://www.decals-oem.com/.  If you do a lot of inner city properties, frames get stolen for the metal value, believe it or not.

•·        Think about what your time is worth too.  If your material costs into the house is $13 you may not even care about abandoning the material after the sale, especially if you have something more profitable to do.

•·        Buy comfortable shoes that are water resistant and have thicker soles.  You don't want to step on glass or a nail.  I like the hiking shoes from Timberland.  They will go with work clothes as well as khaki pants.  Great prices on these can usually be found at Target or DSW.

•·        Get good vendors.  This, like client building, is something you will find over time.  Price is important, but so is service.  Remember how your clients work with you because of trust?  Utilizing a vendor only due to price will cost more.  How so?  It takes a few minutes to hire a trusted vendor vs. the efforts related to finding the best price and then hoping that the guy does good work.  You may also need to spend time checking on the work and supervising the vendor.  This takes time and costs you money.  Also, a vendor that knows you are loyal will give you a deal on price and put you ahead of others.

•·        Spend time building lists of buyers even if you don't work the buyer side.  In REO there is a lot of "investor" property.  Knowing who buys what and where helps you and your client.

Ok.  I'm done for now.

R