Colli Real Estate

What’s the reasoning behind the “Birddog” strategy?

I have concerns over bidding for investment ops at foreclosure auctions, and want to investigate my chances of securing a good price for a preforeclosure home to do up and flip.
Anyone with some experience tell me the thinking behind the doorknocking approach to opening up negotiations which seems very time consuming to me?

Some seasoned investors will pay a finder’s fee to an individual who “doggedly” searches for property to suit your business option. He doesn’t do anything other than identify the prospect for the investor to follow up. Obviously this takes time, since it’s often a combination of searching newspapers and neighborhoods for sale signs, signs of distressed price homes, finding owners of apparently abandoned houses etc, and it can be made a lot easier when he has built up a great base of business contacts, so that the banks & REO institutions, maybe brokers, ring him first when they have a property to offload. A newbie investor may decide to do this himself, and the “organised birddog” strategy is to combine smart mass mailings with doorknocking and follow up phone calls. A friend tells me this works best immediately after the default judgement is entered. In Illinois, you have about 3 months in which you can work on some sellers up till the auction day, as that is the maximum time the owner in default has to exercise his right of redemption.
It’s a known fact that only about 25% of foreclosure filings actually make it to the auction. For whatever reason, clearly there is a wider range of opportunity for this strategy in preforeclosure. If you are a good salesman, you will get the owner not only talking about a sale, but being positive about your offer. And of course getting in the door gives you that better opportunity to assess whether the prospect is worth the costs of follow up to convert into a deal.
There’s a downside- rejection at the door takes several forms and can be stressful. Be realistic, even a supersalesman is going to fail much of the time, or go some way down the path before finding out the figures don’t stack up. There is a great deal of free educational material on this technique, it’s been around a long, long time! And you need to be internet savvy and use listings, any technique that gives you more time to devote to the legwork and financial analysis.

Bidding Strategies – www.policeauctions.com – Auctions

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