OK scenario:
Bought and rehabbed a group of homes at a great price in a inner city neighborhood that traditional marketing (MLS/classified ad) does not seem work in securing a retail buyer.
Am I doomed in these neighborhoods?
Can anyone offer any suggestion on markting ideas to find qualified buyers for this type of demographic?
Are there any course out there that address this problem?
:o
section 8
Skippy,
I have found that many times in those areas the only people that will buy are people whom already live in that neighborhood. I would go over the top with signs and marketing to that area. Try to find an agent who lives/works that market. If that fails, go to the section 8 office and get the list of homes which are for rent. Call the landlord/owners of those properties in your area and see if anyone want to buy more rental units. Keep in mind a landlord is not going to pay full retail.
Tony
Why would you buy in the "HOOD’'Just cause its cheap doesnt mean its a deal.
Skippy,
I market almost exclusively in these neighborhoods…
I have made a niche in areas defined as traumatized, stigmatized, war-zone, ghetto Etc. depending on whom your speaking with.
Everyone deserves a home not just a place to rent.
You are very right traditional marketing does not work in theses areas.
Very few if ANY realtors market outside of the MLS and occasional ad in these types of areas.
I have developed a solid marketing campaign finding my buyers first.
The key is in the buyers not in the property. It has worked out well enough that when my personal inventory is low I am able to provide buyers to other investors and as of late for several hard-money lenders that have had to take back properties…….
Use all the same CRE marketing idea’s to find buyers and properties separately.
The properties are not going anywhere, especially in the less desirable areas.
PM me and I will answer your questions specifically and try to help.
Guru_wanna_be
Hopefully your properties are priced for the income level in those areas.
Not sure if you would want to do this but if your selling them you could offer owner financing with a down payment for people who might not have to good of credit. Not everyone in these areas are the “hood” type of people. They just can’t afford the better areas. If your houses are nice looking and at a good price it shouldn’t take too long to find a buyer.
An investor I work with is a major trader, he will trade anything of value for down payments/monthly payments or rent including vehicles/rec vehicles, labor etc. That might be another thing you could do if you wanted to.
If you want to rent them, offer a little bit of a discount if payment is recieved on time or other incentives to pay on time. Like make the rent due between the 1st and 5th at $500 but if it is paid before the 1st they only have to pay $450-$475. It may not seem like much but to them it might.
Be nice but stern. Let them know upfront when rent is due and if not received within 5 days of the due date, the eviction process will be started or something like that. (Just check to make sure it’s legal) Tell them “you treat me good, I’ll treat you good” or something along those lines.
A lot of the people in these areas are not that different from anyone else. If you give them respect (most likely) you will get it in return.
Advertise with flyers in the area business, freebie papers etc.
Area schools/churches might be a good idea too.
Word of mouth that you are a helpful, nice etc. person will go a long way too so let all the neighbors know about it and like the other person said, put signs on the property and also maybe signs on telephone/light posts etc.
Hope that helped…
In those areas, they will qualify for special down payment assistance programs. They will have to take a class. I know somebody that got 40k for a downpayment from the state in coastal Mississippi. If you can’t use those special down payment assistance programs, you use ones where you fund the charity after they have made a donation to your buyer. You can cover the closings costs of your buyer. You can then use a dpa like Nehemiah, Ameridream, NeighborhoodGold, etc. Advertise, “no closing costs, no down payment”. If you plan to stay in that niche, you can continue to build your buyer’s list with that advertising.
They are good areas if you know what you are doing. Like most have said you need to be careful.
I had a friend of mine put carpet in one day in a “war zone” and the next day the carpet was gone. The house down the street had some nice new carpet in it, but nobody in the area saw anything. The only way they figured it was that house was the cut scraps still on their front lawn. :-X
Guru-wanna-be,
where do you find your buyers - what marketing are you using to find buyers before properties?
All of the above are good ideas… also consider neighborhood or community associations and nonprofits who often provide assistance for homebuyers in disadvantaged areas. Also, check with mortgage lenders for leads, especially those who offer low closing cost and down payment.
Many of your target home buyers are looking for property but can’t find within their price range. Also, consider mailing or advertising to renters. “You can own your home for what you’re paying in rent… we can help!”
JC
Its no secret that houses and opportunity exist in abundance in these war zones and dilapidated areas.
So in “my thinking” I thought why then is it so tuff to market these homes to retail buyers?
This came to me as I watched my hard money lender and several other lenders have to take back properties that were rehabbed but never bought. I have seen this personally in several large metropolis sized cities….
So I started on a campaign to center on buyers:
6 months I looked and marekted for buyers
I built files
I put together a homeowner success package that incorporated services that would help them and if possible create a small profit center….
Most of the costs I would rebate upon full completion and purchase of a home.
This ended up being roughly $1000-2000 dollars a potential homeowner could count on towards purchase. Of course these numbers are an average all depend un severity of financial damage.
In my file building I found most would be homeowners in theses neighborhoods were 6-12 months out from ownership.
Most were employed.
A small percentage was 30-90 day out.
The last group and consequently the least productive of all groups was more than year near anything like ownership.
There is more but at that point I am giving way too much away….
So to sum up I build buyers and then once qualifyied they buy from my group properites…
It works for me in my war zones…
I will add one thing, if you guide a buyer to purchase and use these war zone properties as a stepping stone only not as the last home they will own the chances of follow through increase dramically and the referrals will blow ur mind…
Let me add,
Since working this end in this fashion I rarley have to wholesale to another inevstor.
My last several deals were soley to retail buyers whom walked the valley to earn homeownership.
August I will have a milestone client success.
My first homeowner success will be selling their property and moving to the burbs…
She went from a below 500 score to mid 600’s in 3 years, made 1.5 payments on her mortgage and will be closing with roughly 25K at the table in cash…
The best part is she will be using my lender and my RE angent…
I love it when a plan comes together… ;D