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How do you move more of your real estate assets, faster and more profitably?
We love to see all investors win. Whether you are out there on your own doing real estate deals and funneling part of your proceeds into a fund like NNG, a bank, credit union or servicer trying to recoup investor and depositor capital, or are acquiring mortgage notes from us and are working them out yourself, it’s great to see others enjoying success.
Here we’re talking about selling Other Real Estate Owned versus OREO cookies. Yet many of the same principles for success can apply to both.
Building & Maintaining Trust
Branding is a big part of this. So is being transparent and giving consumers confidence in what they can expect. It doesn’t matter how great the product or property is, it’s about being clear and empowering buyers to make an educated decision, while tearing down the barriers of doubt.
If you are serious about health and having abs, you’ll probably never let an oreo cookie touch your shopping basket, nevermind your stomach. Yet, millions of packets are sold every year. There is something out there for everyone.
Look a the wrapper and packaging on a pack of these cookies next time you are in the supermarket. Despite the brand awareness, the sellers have a lot of data on there. The number of cookies inside, the weight, the flavor, and the ingredients. All upfront. There are even niche varieties. You can get singles, family size, triples, and mint too.
Too often in real estate potential buyers get virtually zero information upfront. They don’t really know what the asset or neighborhood looks like, the potential repair needs or related costs or the profit potential. Then buyers either just skip onto another listing to one which doesn’t require so much guesswork or back and forth, or you have to deal with a lot of communication, going back and forth with a lot of information and questions to see if it is a fit. Is that really efficient or profitable? How can you improve here?
Service and Meeting Demand
You’ve got to make it easy and attractive for people to buy from you and give you their money. It should never be a hassle for you to spend or invest money with someone. Who wants to deal with that?
Oreo comes up with different flavors and sizes of product, and works crazy hard to get the best positioning on shelf space.
When you are holding real estate assets you’d like to sell, you should be constantly asking who your best buyers are most likely to be, where they are and what they want and need to take action.
In some cases there may be benefits of improving properties. Probably not like we see on TV shows, but there can be cases where some efforts can increase value and appeal. Though in most cases, trying to turn REOs into fabulous modern palaces before you market them can result in a loss.
Oreos are not a high ticket price item. Some may be huge fans. Even though you probably won’t find them in fine dining restaurants, they seem to sell pretty well.
Ask any experienced buyer of HUD homes. HUD is famous for making great improvements. Sometimes they’ve put on a new room or put in brand new kitchens. These are great bonuses for real estate investors who buy them. Though in most cases they are just extra icing. It’s the price that made the deal. They would have bought them anyway, even without the new installation.
There are many investors out there looking for rentals and turnkey properties. Some may be able to pitch their product to these investors, and add extra value to them that way.
More often, capital and financing are the keys to helping more buyers. Connect your customers with more financing options or the new financing options for down payments that are coming out. This way you could move a lot more, a lot faster and for a lot more money. PayPal says that when sellers offer credit, buyers purchase 25% more often, spend 40% more, and order 68% more.
Find the Right Business Model
Find the right business model for you and your goals. Is it better to wholesale like oreos to Walmart or go the girl scout cookie method and try to pitch on the street corner or door to door?
Use the right model for you, build and maintain trust, and keep looking for ways you can meet changing demand. By doing so, you’ll be more effective in selling anything.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund