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2011-02-15 20:56:38

REOs & Short Sales: Opportunity of a Lifetime

It's all in the Data

Now, I’m pretty lazy and not very good on the computer, but I have learned to be generous and I have become very familiar with that life saver word – Outsourcing!

So, every morning before I sit at my desk and turn on my computer a really nice young lady somewhere in Nevada (speaks English perfectly and has little kids so she has to get up a lot earlier than me) has already finished some internet research and has gathered all the links for each article and emailed them to me, so when that Microsoft logo thing plays its music and I hit the email button - BING! There they are! All ready for me to read and scan through.  Actually, about 37 different sources of information including articles on websites like The Wall Street Journal,, CNN Money, NAR, CAR, Reuters, FNMA, HUD, Housing Wire and a host of other different sources.

Basically, we’re searching for specific types of information like national news reflecting changes in trends, regulations and laws affecting the broad strokes of our real estate business (like the expansion or contraction of future REO and Short Sale inventories), financing underwriting guidelines, employment etc.

We also monitor local statistical data and news for anything that remotely sounds like it indicates any coming changes that might impact our buy-sell or rental business. For example, changes in trends with respect to the properties entering default and foreclosure, as well as, changes in the disposition of properties being liquidated daily at the court house steps, but just within our local market. We work a fairly small, but unique market known as the Antelope Valley (High Dessert) located approximately 50 miles northeast of downtown Los Angeles.  It consists of about 199 square miles.

All this reading at my computer takes me about an hour (sometimes less, sometimes more) depending on how many articles she sends over which can be as little as ten and as many as forty.  Some sources have more than one good article and some repeat the same story with a different slant.

We also check our MLS daily in just a few, but different ways (all pre-set, something called auto prospecting) because we have learned that the secret of long-term success lies in not just doing the obvious, but in asking new and probing questions about the same old information that everybody is looking at daily and seeing nothing new; yet we find the gold. This is done by my assistant in the office although the searches also go to her iPhone throughout the day. She spends about a total of two to three hours doing all the research and then contacts agents (mostly by email) to submit an average of five to fifteen offers daily depending on what all is going on and such. These are Short Sale and REO properties very seldom third party stuff. All this activity over time yields us an average of a deal a week. If we stop the activity (even for one day) we will see the effects of it later that month or the next without fail.

My Best Assumption

Even though things may seem scary to some of you in this ever-changing "double dip" real estate market, all in all, I must report that on the horizon I see nothing, but opportunity and clear sailing, and full speed ahead!  Ah, yes I know about all the possible problems and pitfalls that we may encounter along the way, and I agree we must be ever watchful and cautious, but please keep in mind the writer has traveled down this marvelous road before -- three prior times to be exact and with all the scars to prove it including two (count them) two bankruptcies under my belt, as well as, once achieving millionaire status (now that was one great year!) then losing everything including my car-- and my friend, you have not suffered until you live in L.A. without wheels.

Of course, I did not remain in that meager downslide. After some well-deserved rest (hiding out time) making pizzas at my local Shakey’s (it was walking distance to my home), I returned to the real estate market in 1995 with a much more mature outlook on the real estate investment business.  Armed with a clear vision devoid of nonsense and showbiz and $6,000 in my pocket that I borrowed from my Dad, I used what I had learned along the way and ended the last downturn in 2006 liquidating 100 single family residences I had managed to buy and hold as rentals at the top of the market and bowed out of the business with a nice neat $10,000,000 paycheck.

And that is why I am telling you all, this market we are presently living through (this crazy rollercoaster ride of utter nonsense and government-created false bottoms and fabricated imaginary appreciation) will reach its culmination in the “Greatest Opportunity of a Lifetime,” and so it will be remembered by all who choose to participate.  As for the others… oh well.

Happy Hunting!

Tony Alvarez has been a successful Real Estate Investor and Certified General Appraiser in the Southern California area since 1981. Tony also teaches, coaches and mentors students in real estate investing.

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