Door knocking update
We have spent the last week and half door knocking at all the pre-foreclosures in Whitfield, Gordon and Bartow Counties. And I have tell you, things are different out there than when we first started this practice.
When we started door knocking on pre-foreclosures in 2012, there would be anywhere from 75 to 150 properties advertised in the paper for foreclosure in each county. When we went to knock on these doors, the majority of them had already been vacated. In other words, we didn’t get to talk to many sellers at that point. The door knocking wasn’t a waste of time, though, because it gave us an opportunity to inspect the properties before the foreclosure auctions.
In the past few years, there would be 15-30 properties per county advertised for foreclosure. Of those, there were still some vacant houses, but we were able to talk to many sellers who hadn’t left yet. This allowed us to craft deals with them before auction. This was beneficial to them because it saved their credit by stopping the foreclosure. It was also beneficial to us because we got these deals without having to compete with other investors on the courthouse steps.
This month, Gordon County had seven properties advertised for foreclosure in the paper. Whitfield had eight, and Bartow had 28. Those are pretty low numbers. And of those, almost all of the houses were still occupied.
As we spoke with these owners, we found they had a heightened sense of situational awareness as compared to owners in previous years. This awareness had made them more proactive. As a matter of fact, I can count on one hand all the owners who clammed up when we showed up. (This is often a sign that those owners have no idea what they’re going to do. We call this the ostrich head in the sand syndrome. And those houses tend to go to auction.)
Most of the owners we spoke with were very informed and confident that they had beat foreclosure. They let us know they were either almost finished with loan modifications or that they were working with bankruptcy attorneys. In the past, most of the owners we met didn’t know those options were available.
Another interesting statistic was that of all the owners we spoke with, only one had made a deal with an investor prior to auction. That means only one person was willing to sell their house at a discount. The rest were doing what they could to fight to keep their homes.
This was a situation we hadn’t experienced in years prior. In the past, most of the owners were just giving up and walking away. I find this renewed fighting spirit encouraging from the stand point that people are taking pride in their communities.
But what does this renewed vigor mean for investors working the pre-foreclosures?
As of yet, we haven’t made an offer on a single house that was in pre-foreclosure.
After reading that statement, I’d understand if your next question was, “Was door knocking the pre-foreclosures a waste of time?” I’d answer that it was a great use of time.
Door knocking the pre-foreclosures got us out actively looking for houses in our area. Plotting the pre-foreclosure addresses gave us a controlled route on which to go driving for dollars. While traveling from house to house, we kept our eyes peeled for vacant and distressed properties. We also talked to the neighbors of the pre-foreclosures we were visiting, asking if they knew of any properties in the area for sale.
Through this process, we found 35 houses that we classify as shadow inventory — you know, properties that haven’t been put on market for sale yet, but probably will be soon. Had we not gone door knocking, we never would have known about those houses. And that is why we will go again next month.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.