Nothing Succeeds Like Success
Derek Ebrecht hasn't been investing in foreclosed properties for all
that long. In fact, his first deal closed less than two years ago, in
February, 2005. Since that time, however, Derek has continued to grow his
business, and today, he completes several deals each year. We caught up
with Derek to learn more about why he focuses exclusively on foreclosures,
as well as what's worked for him to date in closing profitable deals.
ForeclosuresMass Monthly: Welcome Derek. Can
you tell us how you got started in foreclosure investing?
Derek Ebrecht: Sure. I was working full time in
another field, and while I knew I wanted to get involved in real estate, I
wasn't exactly sure at first what my particular focus would be. So I
decided to do what I could to educate myself about real estate and
investments.
I took courses online, read books, joined a mentoring group and got
involved in a local investment club. I just did what I could to learn as
much as possible. As I learned more, foreclosures seemed to make a lot of
sense. At this point, that's where I spend my time.
FMM: What "made sense" to you about
foreclosures?
* Next 37 17 investors only!
DE: The thing I like about foreclosures is that
the people you work with tend to be highly motivated. That's an essential
piece for getting a real estate deal done. People facing a foreclosure
know they need to take action, and the key is to convince them that you
and your solution are what's needed for their situation.
FMM: On that point, what do you find works best
in convincing a home owner to work with you?
DE: Well, of course, the numbers need to work.
These are people who are under a lot of stress, and they have many folks
coming at them from all kinds of angles - bankruptcy attorneys, agents,
mortgage people, banks, etc. So for starters, the deal I offer has got
to be competitive.
But beyond that, it really comes down to building rapport with the
homeowner. In fact, I'd say that if you're not a real people person,
you'll have a tough time being successful as a foreclosure investor. You
can learn a lot in this area, and certainly improve your interpersonal
skills, but I think that on some level, either you're good at building
rapport and trust or you're not, and people can sense that.
FMM: How hard was it for you to get started?
DE: When I began I was trying everything,
including just door knocking and generally fumbling away. It always
seemed to me though, that if I just kept at it, things would start to
click. Eventually, that's exactly what happened.
FMM: Do you have some advice or suggestions for
new investors?
DE: Most important: Keep moving. It took me
five or six months of work until I closed my first foreclosure deal in
2005. That may seem like a long time, but you have to just keep plugging
along. If you stop along the way you lose momentum. The contacts dry up,
the opportunities evaporate, and you end up back at square one. So my
advice is to stay with it, and believe that things will come together for
you.
FMM: Terrific. Any other suggestions related
to closing profitable deals?
DE: I think it's important to have a hearty
negotiation. In fact, and although this may seem counterintuitive, I've
found that if you're too quick to make the deal happen, people often end
up with seller's remorse.
FMM: That does seem counterintuitive. Isn't a
quick deal what everyone wants?
DE: Well, that's what everyone may say, but in
practice, I find that people like to negotiate a bit. For example, we got
a call recently from a gentleman who, while not yet in foreclosure, was
just tired of dealing with certain things and wanted to get out of his
property. We came in, saw that the house had good bones, and felt that
with a bit of clean up, we could flip it quickly. So we made him an
offer. Not our best offer, but reasonable.
We ended up going back and forth a few times and in the end, he felt good
about how it came out. The thing is, had we offered the higher price up
front - our true top figure - even if he accepted, he would have been less
satisfied.
Think about it. If I give you a price and you accept with no negotiation,
you go away wondering if you could have gotten more. In turn, I may go
away wondering if I could have offered less. If one side feels like the
other side got it all in a deal, something will go wrong, and so
negotiation on the way to agreement is always good for both sides.
FMM: That's a great insight. Any final
recommendations before we let you go?
DE: Just one... don't cast too wide a net at
first. When I started out, I was way too broad. I was sending letters
out for anything from Worcester going east. People would call and I'd
drive an hour to look at a place. I realized eventually that I was
casting too wide a net, and that the standard advice of staying within 30
minutes of your own backyard was valid. Once you become more successful
and have more resources, you can always expand, but when you start, do
your best to stay geographically focused.
Derek Ebrecht is a licensed Massachusetts Real Estate Agent and
investor. He works in the Greater Boston area. He can be reached at
derekebrecht@hotmail.com
Did you like this article? You May Also Like:
 |
Feature Article: How Effective Networking Helps You Close More Deals
Susan LaPlante-Dube
Motivated buyers. Motivated sellers. Real estate investors. Home improvement specialists. Home inspectors. Electricians. Appraisers. Bankers. Mortgage Brokers. Real estate attorneys. The list of people you need to run a successful...
|
 |
Interview with the Expert: Real Estate Savvy Financial Planners Can Save You Big Bucks!
Eileen Schwartz, Real Estate Investor
Let's say you want to pay off your mortgage and buy the retirement home of your dreams by selling one or two of your investment properties. What most people don't consider, explains financial planner and real estate investor Eileen Schwartz, are the tax implications of these real estate transactions. In this interview, Eileen discusses why working with a financial planner who also understands real estate (including 1031 exchanges!) can literally save you big dollars - now and in the future.
|
 |
Feature Article: Financing Your Foreclosure Investment
Deborah Siegel
"I'm looking for a good deal!"
I hear this sentence several times a week. Unfortunately, you're not the only one looking for a great deal on a house, but you can separate yourself from the rest...
|
 |
Feature Article: Four Marketing Secrets Turn Connections into Gold
Ken Lizotte, CMC
Beyond the usual blah-blah marketing advice of putting up a website, printing out a stack of business cards and designing a lavish four-color brochure, exists four powerful marketing techniques that are so little-used, they can for all practical purposes be labeled "secret." Read on as Ken Lizotte tells all...
|
 |
Nothing Succeeds Like Success: Accountant Turned Real Estate Investor Closes 10 Deals First Year Out
Paul Deltorio, CPA
After twenty-five years as a CPA, Paul Deltorio was ready for a change. With coaching from real estate investor Jim Gage, Paul launched a successful real estate business, closing ten deals in twelve months. In this interview, Paul explains how Jim taught him to approach homeowners experiencing foreclosure, identify great deals, and stay focused on his goals. One year out, Paul is considering giving up accounting to pursue real estate full time!
|
 |
Technology: Leveraging Technology To Maximize Success
Jay Case
Consumers are doing more and more business through Internet sites and e-mail. They also are more plugged in to mobile devices, relying on their cell phones, pagers, PDAs and other gadgets to keep them connected business associates...
|
 |
Interview with the Expert: Look at Deals with an Appraiser's Perspective
Mark Jackson
Do you truly know your market and how to determine the value of a property? If not, you may not be making as much money as you could. Why? You're not seeing properties from a trained appraiser's perspective and could be buying duds. In this interview, expert appraiser and real estate investor Mark Jackson explains why you need more than the MLS and comps to determine a property's value - you need comprehensive market demographics.
|
|
Feature Article: 4 Things You Probably Don't Know About Credit
Deborah Siegel
Credit is the starting point from which lenders of all types and sizes will decide whether or not you are a good risk. But it's not as obvious or as straight-forward a process as you may think. Read on as Debbie Siegel explains what really goes on behind-the-scenes.
|
 |
Feature Article: Maximizing Your Success at an Auction: Do's & Don'ts for Before & During Auctions
Dale Schaetzke
Are you intrigued by the opportunity to buy property at auction but unsure about how to navigate the system? Knowledge is power before and during an auction, so take the time to educate yourself about the process before jumping in...
|
 |
Interview With The Expert: Managing "Bad" Credit
Marty Eerhart, Senior Loan officer, Assured Mortgage
Getting the approval needed for an investment loan is heavily dependent on your credit score. Unfortunately, if you have "bad" credit, it can get in the way of making a purchase. Marty Eerhart talks about what you can (and can not) do to improve your credit score.
|
