Nicole Thome

Home builders are having a hard time moving inventory right now. To anyone in that industry, this obvious statement is not news, but rather a frustrating repetition of reality. But calling the present state of affairs in the housing construction market a “hard time” is an insult to the word. You’re looking at “hard” in the rear view mirror and watching “catastrophic” looming on the road ahead. In fact, builders are on track to construct the fewest single family homes in history during 2011.

In history! That covers a lot of ground because the human race has been living in houses for a while now.

July numbers show housing starts down another 1.7%, which doesn’t sound like much but translates to plenty of economic pain for an industry that’s been battered in recent years. The interesting thing, though, is that when you delve into the numbers more closely, you find that while single family starts were down 4.9%, multi-family starts were up 6.3%. You read correctly. UP. Actually, this does make sense and reflects a reality that Open Door Auctions has been pointing out for a while now.

Homeownership continues to decline as consumer confidence sinks, not helped in the slightest by the recent debt ceiling debate and national credit rating downgrade. But there has been a pleasant side effect that should buoy the spirits of home builders in the multi-family housing business. The reason is simple. The lack of confidence towards owning a home results in a soaring demand for rentals. People aren’t renting single family homes with the intention of eventually owning it. Many can’t get a loan and, even if they could, aren’t about to run out and buy a house in this economic climate.

Mid-Atlantic Builders of Rockville, MD, provides a good example of the mess home builders find themselves in these days. Executive Vice-President Stephen Paul had this to say: “”We started what we call the spring market in February. We started out very strong, we had a good February, March, even into April. What started to cause consumer confidence to wane was the escalation of gas prices, the debt issue with the government, and what’s going on in Europe.” Does this sound like a lack of confidence to you? It does to us. Paul added, “We see people not sure what to do at this moment and a little unsure,”

That leaves us with a surprisingly robust rental market because, as Jason Hartman is fond of saying, “Everybody has to live somewhere. Housing is a universal need.” But the twist on the scenario is that rental demand is rising in what is called multi-generational family homes, which include an add-on suite for parents to move in for the express purpose of helping out with expenses like mortgages and insurance. Maybe single family residences aren’t selling right now but rentals and multi-generational structures are! Which means if you’re a builder who has inventory of this type, we’re ready to help you sell it.

Too many builders spend too much time and effort trying to sell their inventory of houses with the traditional real estate industry’s approach. The problem with that is that the wheels of progress move so slowly you’re stuck with a backlog of properties sitting on the market for an eternity while an agent slogs through the showing and negotiation process. Real estate veteran, Jason Hartman, couldn’t help but notice the dysfunctional nature of the way things operated, and decided to change all that. The end result was Open Door Auctions (ODA), an entirely new approach to buying and selling houses that uses volatility to turn the MLS into a virtual stock market for real estate.

The bottom line is that Jason and his team of experienced innovative agents, like Molly and Nicole, stand ready to help home builders sell their inventory in two short weeks. With a process unconstrained by a century of misguided tradition, we get your houses on the market and sold quickly, usually drawing anywhere from ten to two dozen bids at auction. If you’re suspicious about our real-world results, we don’t blame you, but remember, plenty of people used to have a highly suspect opinion of the internal combustion engine also, and it’s been around for a while.

There are a couple of ways we’d like to reassure you that the Open Door Auctions strategy works and is the best approach for your business in this wretched market. The first is simply to visit our website and browse our listings of properties, both sold and for sale. The numbers are real and the demand is there. If your real estate agent is whining about low demand, he’s doing something wrong. We’re selling houses of all types nearly every weekend, after our two week marketing blitz, of course.

The second way to soothe your concerns is simply to contact us through the website. One of our well-qualified agents will be in touch with you shortly. Home builders ready to get inventory moving right away, should navigate to the “sell” section and get started.

The Open Door Auctions Team

When you’re ready to sell your house, it’s assumed you prefer to do it quickly rather than slowly, though we offer our apologies to sellers in the latter category. It’s safe to say the VAST majority want to move that real estate out of their hands pronto. It used to be that your best hope to sell your house quickly was to list it with a traditional real estate agent and then get busy praying because the whole house sales process seemed to be out of your hands.

Turns out the world of real estate has changed a bit and you now have almost complete control over the time your house spends on the market. While no one can guarantee exactly what the final purchase price will be, we can offer you six tips almost guaranteed to have it spending less time on the market. MUCH less time on the market. How does two weeks sound?

1. List with Open Door Auctions: It may be self serving, but since it’s true, we hope you’ll forgive us. Our business model is built around taking your property through the entire sales process – listing to acceptance – in two short weeks. That’s fourteen days where we come from. If you do nothing else right in this year, choose to sell your property with us and you’ll be okay.

2. Pick a Price: Have you been the unfortunate victim of price badgering by your real estate agent? We don’t want to paint with too broad a brush but we’ve heard more than one horror story of overly exuberant agents who don’t want to hear input on the listing price from the property owner. We believe that it’s your property. You should pick the opening list price. With our real estate sales model, it gets reduced every few days to bump it back to the top of the MLS, so don’t get too hung up on the initial listing.

3. Don’t Wait for the Phone to Ring: Yes, we’re adding another action you DON’T have to do to the list, namely, don’t grow to hate your telephone as we call umpteen times a day with the excruciating but all too common offer/counteroffer process. We don’t play that old-fashioned negotiation game when you ask us to help you sell your house. Our innovative house auction process is designed to attract anywhere up to 30 bids or more by displaying the property at various price points over the two week time span. Though you’re welcome to call us any time you have a question, don’t worry about us bugging you. It simply won’t happen.

4. Ponder Your Choices: Strange as it might seem, there’s not a whole lot for you to do between the time we list your house and the time of the auction two weeks later. Relax and rest easy that your house is in the hands of real estate marketing professionals like Molly Rielly, who is highly experienced in all phases of the industry, having logged more than twenty years from San Diego to Orange County. Your services won’t be called upon until the day of the house auction when Molly, Nicole, or Jason present you with a handful (or more) of bids for your house.

5. Decide! The last step of the process of selling your house is to decide which offer to accept. We should remind you that you don’t HAVE to accept any bid, but should remember that the local market has spoken with a frequently unerring opinion of what your house is worth. Sometimes it’s less than the ideal number you had in your head and sometimes it’s more. You’re under no obligation to take any of them, though we do suggest you think long and hard before deciding not to sell. The market is rarely wrong and you are probably more than ready to get on with your life.

The preceding five steps to sell your house are all you really need to know. It’s not complicated and it’s not slow when you opt for Open Door Auctions.

The Open Door Auctions Team

When a new way of doing business appears on the scene, people tend to be (rightly so) a little bit suspicious about the whole thing. As a species, we cling tightly to the familiar until the unfamiliar proves itself, and real estate is no different. For eons, it seems like, folks who want to sell their houses have gone about it in generally the same way: find an agent, sign a listing agreement, then get the heck out of the way and wait for 6 months (or more) for something to happen.

In the old fashioned real estate process, all the power lies with the agent.

The Open Door Auctions house auction process changes all that. Of course, we’re not the first business to hold a house auction but we are the only one to create an entire new business model around it. But first things first. Why should you trust us in the first place? Actually, there’s one very big reason and his name is Jason Hartman. Jason spent two decades doing real estate deals the old fashioned way, but couldn’t get away from the idea that there had to be a more effective way to connect buyer and seller.

As his real estate career morphed into writing, public speaking, and other entrepreneurial pursuits, his desire to re-invent real estate never left his mind. He formed Platinum Properties Investor Network (PPIN), then established a podcast, The Creating Wealth Show, that has garnered a worldwide audience – all the while his mind was pondering how to design a house selling process that was good for the seller, good for the buyer, and even good for real estate agents smart enough to take advantage of it.

Powered by the knowledgeable and talented team from PPIN, Hartman’s Open Door Auctions has achieved the final goal of turning the traditional industry on its ear. Instead of watching that “for sale” sign slowly turn to rust in your front yard, the Open Door Auctions approach takes a scant two weeks to uncover the best available price for your house.

To learn exactly how it works, call our trained agents at 714-820-4250.

The Open Door Auctions Team

While Open Door Auctions doesn’t specialize in foreclosure auctions, it has not escaped our notice that property investors are beating bushes and shaking trees to ferret out the best deals. With more than two decades of experience in the real estate industry, we’ve seen enough foreclosure deals close and collapse to be able to offer you four solid ways to give yourself the best chance to score that primo property at the next foreclosure auction you attend.

First of all, let’s take a look at the numbers. Buying properties at auction is hot right now, and judging by the continued rate of foreclosures hitting the market, it won’t be letting up any time soon. In case you have the mistaken idea foreclosures are waning, look at these numbers.

* lenders filed 3.8 million foreclosure notices in 2010
* that is 2% more than in 2009
* that is 23% more than in 2008
* 2011 is expected to be even worse, according to RealtyTrac

(click here to read the whole sordid mess behind the numbers)

So don’t let anyone tell you that foreclosures are on the decline, because they’re not. For the savvy investor, there is still money to made buying properties at foreclosure auctions. Here’s how.

1. Quantify – Before you even think about showing up and bidding at a foreclosure auction, do your homework. You have to be able to affix solid numbers to a variety of factors related to the property. Hold it up against comparable (comps) houses in the neighborhood in terms of value. Inspect the house thoroughly and know how much repairs are going to cost. Are there any weird things going on in the neighborhood that could affect your ability to rent the thing? Like a hog farm going in upwind across the street? Or maybe a race track around the block that revs the engines late at night on the weekends? To put it plainly, don’t even think about bidding on the place unless you have quantified anything that could eventually be adverse to your profits.

2. Start Small – For a rookie investor, it’s a good idea NOT to jump into a bid-calling, whistle-blowing, finger-signaling war with a bunch of veterans on the courthouse steps. Before you know it, they will have bid you up far past the level you wanted to go, then jumped out, leaving you holding the bag. Get your feet wet in the foreclosure auction arena by attending a small auction as an observer only. Perhaps the biggest mistake you could make at a public house sale is to start bidding at the first auction you attend. By all means, go, but keep your hands firmly in your pockets.

3. Certified Check – One way to prove to everyone that you don’t have a clue about auctions is to show up without a certified check, usually for at least $5,000, depending upon the size of the properties being sold. You need to have this check to show the auction company you’re not just a tire kicker and have the legitimate intent to buy a property, if you’re bidding. Don’t forget to include the “buyer’s premium” in your calculations, which is a commission that often must be paid to the company conducting the sale.

4. Get the Best Deal – When it comes time to dive into the bidding, here are a few things you should know in order to walk away a winner. The first few properties often go for less because bidders are trying to get a feel of the sale’s pulse. This gives you a chance to jump in a scoop up a property or two while everyone else is getting limbered up. And don’t forget, during the homework phase, not to obsess on a single property. You’ll have plenty of time to scope out more than one and you should do your due diligence on several. Give yourself an edge during the actual bidding by not joining in on a flurry of bids. This only serves to help drive the price higher. Instead, wait until the chaos has died down to inject your offer.

If you’re at an auction and notice a group of well-dressed men clustered around the auctioneer, don’t assume they represent the lender and are there to outbid everyone. There’s a good chance they might actually turn out to be clever bidders who arrived early dressed for the part, seeking to intimidate others from bidding against their supposedly “deep pockets.” YOU should pull out your best business suit and try this tactic. It might help dampen the bidding enthusiasm for a piece of real estate you covet. Remember, all’s fair in love, war, and foreclosure auctions.

The Open Door Auctions Team

We’re going to talk about house ownership and investing in a slightly different way here today, so hang on for the ride. The first point is that, economically speaking, having a bunch of equity vested in your house is a bad idea. At Open Door Auctions, we understand that the idea of a pile of cash growing exponentially inside a mental vault in proportion to the dwindling amount of principal left on your mortgage note gives comfort to a certain percentage of home owners. What a person often fails to take into account is that inflation constantly erodes the real value of home equity, causing it to be worth less with each passing year.

What should you do about the situation?

There are two possibilities. The first is to refinance your existing mortgage, pull out the equity, and put it into something that will actually grow your personal wealth – like more debt. Calm down now! We haven’t lost our minds. We’re talking about a very particular kind of debt. Specifically, long-term, fixed-rate debt in the form of a loan tied to a piece of income producing property is what you’re looking for. This is the only way we know of to make inflation work for you rather than against. Consider that your tenant’s rent pays the monthly bank note and, hopefully, offers positive cash flow as well, but that part isn’t critical. The critical idea is that the effect of inflation over time causes the real value of your mortgage principal to decline, which is the same as reducing the value of what you owe the bank.

That’s how to make inflation work in your favor. Conversely, if equity is left sitting in a home, which is the same as if you had stuffed cash under your mattress, inflation devalues it at the rate of about 10% annually.

Your second option is to sell the house entirely and use that equity to invest in income producing properties. You might buy a duplex, live in side side, rent out the other. You might also take some of your cash to put a down payment on a home (the minimum amount allowed by the lender) and the rest to finance as much rental real estate as possible.

We realize that some of these ideas might seem foreign at first, but you should know that this method is how Americans are still building wealth today. For a more in-depth (and free) education on the topic, visit our affiliate, the Creating Wealth Show.

The Open Door Auctions Team