One owner’s misfortune is another’s fortune-in-the-making
Alexis McGee sees foreclosure -- or, more accurately, the threat of foreclosure -- as a ripe business opportunity, and with care, clarity and considerable knowledge, she sets out to explore this territory in depth.
Her book comes at a time when over-stretched borrowers are losing homes across the country, including in California.
Drawing on more than 20 years as a real estate agent, investor and industry trainer, McGee outlines strategies for finding properties, negotiating with owners, buying homes (or handing them off to other investors), fixing them up and selling them for handsome profits. The result is a comprehensive guide that holds the promise of making big money without prior experience or even any cash in hand.
But McGee makes it clear that she’s not promising a short cut to riches. She says those who follow the career path mapped out in her book will need to show perseverance and tenacity in locating and following through on the right buying opportunities, integrity and honesty in dealing with people who may be confused and vulnerable, plus an unwavering capacity for hard work.
There’s a lot of worthwhile information here. The problem is that you have to wade through hype, self-promotion and a certain wild-eyed, evangelical fervor to find it.
McGee is president of ForeclosureS.com, which she and her husband started more than a decade ago. The site, which she plugs relentlessly, offers education on investing in foreclosures through courses, study programs, coaching and other tools, the latest being this book.
All sorts of circumstances drop people into foreclosure. But the majority probably can blame a nationwide property-buying frenzy that saw lenders shoehorning people into homes they realistically could not afford.
As McGee points out, many of these people now face the bleak prospect of forfeiting their homes, losing any equity and seeing their credit record shredded. Encouraging others to make money from this misfortune needs to be done sensitively, and McGee wastes no time in scaling the moral high ground.
She constantly refers to pre-foreclosure investors as “white knights,” whom she sees riding to the rescue of homeowners tottering on the edge of ruin. McGee believes these people can be saved and sent on their way with money in their pockets by investors who care about them and treat them with respect.
“It’s ethical, it’s honest and it’s an opportunity for hefty financial rewards along with the personal satisfaction of helping others,” she says. Indeed, she counsels would-be investors to extend the same helping hand even when a foreclosee’s best option is not to sell them the home.
McGee preaches the importance of negotiating win-win deals, but at times, we catch glimpses of an iron fist in the velvet glove. Indeed, the gulf between investor profits -- on average $45,000 per $300,000 property -- and homeowner payouts seems to reflect the obvious inequality in the bargaining positions of the two parties.
During these negotiations, investors are urged to consider the needs, not wants, of the distressed homeowner. But that doesn’t sit too comfortably with a technique for visualizing success discussed earlier in the book, which exhorts investors to imagine ". . . the Jaguar in the driveway, the summer home on the lake.”