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Why Your Foreclosure Market Penetration Methods Are Failing

Last month I met Laura and Erica—two real estate entrepreneurs who’d recently started getting their feet wet in the wholesale game. Our encounter happened at the oddest of moments: me doing research on marketing efforts, while the two of them were nearby, scrambling for a notary to push their next flip through. As fate would have it, we bonded over a mutual interest for real estate. Spending the better part of 45 minutes or so discussing their market penetration methods and what kind of properties they were looking for. And like everyone else in the business, the two had their eyes set on the foreclosure hills.

Hidden Opportunity?

For some reason, everyone ranging from novices to mid-experienced “realpreneurs” think that the final frontier is the foreclosure market. It seems—and this is true to some extent—that the reason for this hardline of thinking rests on the fact that contacting homeowners going through the foreclosure process isn’t as easy as picking up the phone and calling, or going through a white pages. (For those of you that don’t know, once upon a time, there was a paper book with white pages that listed the phone number and address of city residents.)

The difficulty in reaching these people is super high for a variety of reasons. The main reason—which swallows all the others—being, wherever you got your listing from won’t have the homeowner’s property address and definitely won’t have their phone number. But despite your list of seemingly clever ploys to detect this information, you’ve been unable to gain traction.

Your Penetration Problem

So why haven’t you penetrated the market or been bombarded by calls or letters from desperate homeowners?

First, you’re in denial about them being in denial. A person in the midst of losing their home isn’t thinking about help from you or any other buyer. Right now, they can’t believe this is happening and are more than likely gravitating towards friends, family, and non-profit support to stay in their home. You’re probably not even in the running for their attention. Who the hell wants to read a letter from some dick offering to buy their house or help stay in it, when they don’t even know why I’m in this problem in the first place?

Which brings me to my second point—reinvent the wheel. For those of you that have no idea what this means, I’ll enlighten you: cold calling, letter mailing, and even putting signs in the lawn of people going through foreclosure is a bad idea. Predominantly because all you’re doing is the exact same thing that every investor mining for real estate foreclosures is doing—trying to get in touch with people via any means possible. You need to design a creative way to get people’s attention, without mimicking everyone else. And I’ll tell you something you probably aren’t even thinking: your market is really heavily saturated and you’re the only one that doesn’t know it. You think you’re different. Frankly though, you aren’t.

Finally, the last problem is the simplest and truest. You don’t know the foreclosure market. The regular residential market is nothing like the foreclosure market in your area, or any area for that matter. If you want to penetrate this market, you’re going to have to do your homework and start asking some very hard questions. For instance, are you targeting mortgage, tax foreclosures, or an estate sale? (I’m sure that some of you reading this had no idea that you could find a good property deal at an estate sale.)

Finding Solutions

Once you sit down and tackle these problems, you’ll be way ahead of your competitors. Not just because you know your market, but because now you know exactly who you’re trying to reach, why you’re trying to reach them, and better still—how you’ll reach them.

About the Author

William Alexander is a contributor and adviser at

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Recommended: “Should You Be Buying Real Estate In Bulk?” Find it here:


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